ADR – American Depositary Receipts
ADR is “ADRs” in English shorthand, its full name is: “American Depository Receipts”. American Depositary Receipts are issued for the U.S. investors and securities market transactions in the U.S. depositary receipts. First of all, American Depositary Receipts from the U.S. financial giant JP-Morgan to create. U.S. investors bullish on 1927 British department store Selfridge’s company stock, because the relationship between the region, which U.S. investors to invest in the stock is very convenient. JP-Morgan was on the establishment of an American Depositary Receipt (ADR), so that investors holding shares Selfridge Selfridge shares can be designated to the Morgan in the United States and Britain there are branches of a bank, and then from the bank for distribution to investors in ADRs.
Such Depositary Receipts may be circulated in the U.S. stock market, the original holders of Selfridge stock investors do not have to go to England to sell the stock. At the same time to invest Selfridge stock investors do not have to and then to the British stock exchange to buy Selfridge stock, you can purchase the shares in the American Stock Exchange American Depositary Receipts. Whenever Selfridge company dividends and other matters relating to allotment or issuance of American Depositary Receipts in the United Kingdom branch of the bank will help American investors in allotment or dividends. This eliminates the need for U.S. investors to the UK to the trouble of placing and dividends.
ADR to resolve the United States and foreign securities trading system, practices, language, foreign exchange management in different Suozaochengde transactions of the difficulties, foreign Gong Si in the U.S. market Chouzi the important financial instruments. U.S. investors are also the most widely accepted form of foreign securities. U.S. law to protect the interests of domestic investors, corporate bodies and the private sector provisions of the retirement fund (the money still comes from the common people) can not invest in shares of companies outside the United States, but issued by foreign companies in the United States are treated as U.S. securities DR can invest.
ADRs appears, countries have introduced according to the situation for their depositary receipts, such as global depository receipts (GDR), International Depositary Receipts (IDR) and currently has just made in China, the Chinese Depositary Receipts (CDR) . Chinese Depositary Receipts are issued in mainland China or Hong Kong stock market on behalf of foreign securities a particular securities.
Since 1993, China also issued in the U.S. ADR, including the Shanghai Stock Exchange “rubber tire”, “Chlor-Alkali Chemical Industry”, “Erfangji” and the Shenzhen Stock Exchange, “Shen Shenfang” The four companies are considered a ADRJp issued only counter market transactions, no fund-raising functions. Since then, the “China Huaneng Power International,” “Shandong Huaneng” depicts three AfJR liter raised on the New York Stock Exchange.