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American depositary receipt (ADR)

An ADR is a U.S.-traded certificate issued by a depositary bank that represents a stated number of shares, or a fraction of a share, in a foreign company.

By Betta Signals Research Desk · Reviewed October 24, 2026

Plain-English definition: An ADR is a U.S.-traded certificate issued by a depositary bank that represents a stated number of shares, or a fraction of a share, in a foreign company.[1]

How the term is used

The U.S. ticker identifies the receipt, not the foreign ordinary share itself. The depositary ratio, currency conversion, fees, foreign taxes, trading hours, and disclosure regime can all affect what an ADR holder experiences.[1]

What to check before relying on it

Confirm the depositary, ADR-to-ordinary-share ratio, listing venue, reporting status, and dividend conversion before comparing the ADR with the home-market share.

Example

If one ADR represents two ordinary shares, a per-share figure from the foreign filing cannot be compared directly with the ADR price until the ratio and currency are handled consistently.

Share classStockDistribution

Research last reviewed: October 24, 2026. This definition is educational and does not evaluate a particular security.

Sources

  1. SEC Investor Bulletin: American Depositary Receipts — ADR structure, depositary banks, ratios, fees, currency conversion, and disclosure considerations. Accessed October 24, 2026.