For example, the ADR "RDS A" for Royal Dutch Shell has a ratio of 2:1, or two ordinary shares per one ADR. This is one major way in which traditional U.S. stocks differ from ADRs. Stocks with an X code are mutual funds. The ADRs that are sold in US financial markets can be categorized into sponsored and unsponsored. ADRs are issued by U.S. depository banks, which first purchase shares of a foreign company’s stock, then hold the shares as inventory and finally issue ADRs for trading on the U.S. exchanges. Of the 2 brokers I've used for foreign stock purchases, eTrade and Merrill Edge, neither have charged any fees for both ADRs and F-shares beyond their regular commission. Type of ownership of shares to non-Thai's. For a sponsored ADR, the foreign company issuing shares to the public enters into an agreement with a US depositary bank to sell its shares in US markets. An ADR can represent a one-for-one exchange with the foreign shares, a fraction of a share, or multiple shares. The two main factors are liquidity and the price difference, or "spread," between the ADR and the ordinary. Note that the number of ordinary shares that make up each ADR varies, and the ratio of shares to ADR is indicated by the ADR ratio. A mutual funds is a pool of stock in which you can buy shares. ADRs are shares of stock traded on foreign exchanges that get bought by American investment banks for resale on American markets as ADRs. By listing as an ADR or ADS, foreign companies can access U.S. capital markets. ADRs were created as a … As a non-Thai national, Thaistocks.com always recommends to own either, the NVDR (R) or as a second alternative the (F) shares. Siemens AG ADR. If a foreign company with ADRs wishes to raise capital in the United States, it would separately file a registration statement on Form F-1, F-3, or F-4. Ordinary First question: whether you should buy an ADR vs. an ordinary. Types of American Depositary Receipts. The bank has bought the actual shares, but investors here trade the ADR certificates that represent those shares, not the actual shares. Again, a s a non-Thai you can own either the foreign shares (F), local shares (L) or, so called NVDR's (R). 1. X. Unit 6: Foreign vs. Local Shares. As a way to simplify currency changes, ADRs were introduced to investors interested in purchasing shares of a company based in a foreign country – ADRs are denominated in U.S. dollars. Iirc it's … If the shares were trading at 35.00 USD, the price of the ADR would likely be around 70.00 USD. An ADR stock or ADS is a foreign stock that allows U.S. investors to trade its shares on a U.S. exchange. I am assuming you are asking which is better, buying a foreign stock (directly on their market or OTC) vs buying it’s ADR. ADR vs. The answer to this question is it depends on your planned holding time (investment horizon). F stocks are truly foreign, while a Y indicates an American Depositary Receipt. Siemens AG engages in the production and supply of systems for power generation, power transmission, and medical diagnosis. If a foreign private issuer seeks to list ADRs on a U.S. stock exchange, it would separately file with the SEC a registration statement on Form 20-F . Sponsored ADR. However, apparently some brokers such as IB tack on extra fees for F-shares.