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Postby chandniwadhwani92 » Mon Nov 03, 2014 3:58 pm

The security on which the ADR is based in American deposit share which trades in firm domestic market
What does this sentence meas?///
Can u briefly explain American deposit share?????

Some firms i AdR are registed in SEC BUT SOME ARE PRIVATELY BASED.
How they are privately placed??????

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Postby edupristine » Tue Nov 04, 2014 10:51 am

What is an ADR?

An American Depositary Receipt (ADR) is a certificate that represents shares of a foreign company (a non US firm) and issued by a U.S. bank. The foreign shares are usually held in custody overseas, but the certificates trade in the U.S.

Through this system, a large number of foreign-based companies are actively traded on one of the three major U.S. equity markets (the NYSE, AMEX or Nasdaq).

What is Private Placement?

Some foreign companies will set up an ADR program under SEC Rule 144A. This provision makes the issuance of shares a private placement.

Shares of companies registered under Rule 144-A are restricted stock and may only be issued to or traded by qualified institutional buyers (QIBs). U.S. public shareholders are generally not permitted to invest in these ADR programs.

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