16 November 2009
American Depositary Receipts (ADRs) enable US investors to acquire and trade non-US securities denominated in US dollars. They can be listed on a major US Stock Exchange. A capital raising ADR requires the issuer to submit a Form F-1 to the SEC. They are usually listed on one of the major US exchanges, which enhances the issuer's name recognition in the US. SEC reporting is required
Global Depositary Receipts (GDRs) give access to two or more markets, most frequently the US market and the Euromarkets, with one fungible security. GDRs are most commonly used when the issuer is raising capital in the local market as well as in the international and US markets, either through private placement or public offerings. The Euromarket component is often listed on a major European exchange. The US component of a GDR is normally structured either as a Level III ADR with full disclosure and reporting to the SEC, or privately placed under Rule 144(a), in which case full compliance with the SEC's onerous reporting and registration requirements is avoided.
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