American depository receipts. Theory and practice

Nowadays more and more companies all over the world are looking forward to attract international investors. Going public at a stock exchange is one of the most attractive and cost efficient ways of getting financial inflows. Hence there are companies that prefer local, state stock exchanges, large majority rushes for international stock exchanges, such as NYSE and LSE.

Introduction 3
What is a DR 4
History and Reasons for using ADRs 5
Benefits of ADR’s 7
Benefits to a Company 7
Benefits to an Investor 7
ADRs vs. Stocks 9
ADRs' Special Risks 10
Advantages of ADRs 11
Disadvantages of ADRs 11
Types of DRs 12
Practice: how are DR’s traded 14
Buying and Selling DRs 16
Procedure of issue of ADR 18
Cancellation 19
Trading - (Pricing) 19
Equity Offerings 20
Conclusion 21
Endnotes 22
Bibliography 23