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What are ADR programs?

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An unsponsored ADR (UADR) is an American depositary receipt (ADR) that is issued by a US depositary bank in an unsponsored program without the contractual involvement of the issuer of the underlying stock, usually initiated by the depositary bank in response to broker/investor demand.  An UADR is traded in the US over-the-counter (OTC) market once the depositary 6606e532e4cfe6606e532a9f72confirms that the issuer of the underlying meets its 12g3-2(b) requirements.  For an unsponsored ADR program, an unlimited number of depositary banks may issue the depositary.

A sponsored ADR program is an ADR program initiated at the request of the issuer of the underlying and through establishment of a deposit agreement between the issuer and the depositary bank that issues the ADR.  There are three types of sponsored ADR programs:

  1. Sponsored Level 1 ADRADRs representing existing securities are issued by a US depositary bank that are traded on the US OTC market – not a6606e532aa1e3registered exchange, it meeting the minimal registration and reporting requirements of the US Securities and Exchange Commission (SEC);
  2. Sponsored Level 2 ADR – Meeting the registration and reporting requirement of the US SEC, ADRs that represent the existing shares are issued by a US depository bank that are listed and traded on a registered US exchange (e.g., NYSE, NYSE MKT or NASDAQ); and
  3. Sponsored Level 3 ADR – Fresh capital is raised by a foreign company in the US market through a public offering of ADRs that trade on a major US registered exchange, it requiring the filing of a registration statement with the US SEC and full compliance with SEC reporting requirements.
ADR Programs for Public Trading
Traded SEC Filing Initiator Shares
Unsponsored OTC* Form F-6, 12g3-2(b) exempt Bank Existing
Sponsored Level 1 OTC* Form F-6, 12g3-2(b) exempt Issuer Existing
Sponsored Level 2 Exchange Form F-6, Form 20-F Issuer Existing
Sponsored Level 3 Exchange Form F-6, Form F-1, Form 20-F Issuer New
Unsponsored OTC* Form F-6, 12g3-2(b) exempt Bank Existing
* Including OTC Bulletin Board

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