American depositary receipt

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An American depositary receipt (abbreviated ADR, and sometimes spelled depository) is a negotiable security that represents securities of a foreign company and allows that company's shares to trade in the U.S. financial markets.^[1]

Shares of many non-U.S. companies trade on U.S. stock exchanges through ADRs, which are denominated and pay dividends in U.S. dollars, and may be traded like regular shares of stock.^[2] ADRs are also traded during U.S. trading hours, through U.S. broker-dealers. ADRs simplify investing in foreign securities because the depositary bank "manage[s] all custody, currency and local taxes issues".^[3]

The first ADR was introduced by J.P. Morgan in 1927 for the British retailer Selfridges on the New York Curb Exchange, the American Stock Exchange's precursor.^[4]

They are the U.S. equivalent of a global depository receipt (GDR). Securities of a foreign company that are represented by an ADR are called American depositary shares (ADSs).