U.S. depositary bank issued certificates. These represent foreign shares owned by the bank, usually through its branch or correspondent set up in the issuing country. A portion of foreign share, a single share or a group of shares of the foreign corporation may be represented by a single ADR. In case of sponsored ADRs, the corporation provides information pertaining to finances and other aid to the bank. It may also subsidize the ADR administration. For unsponsored ADRs no such assistance is received. The currency risks- both political and economic, of the ADR match that of the underlying foreign share. Their prices are, when adjusted for SDR/ordinary ratio, kept equivalent through arbitrage opportunities. Another similar certification is American depositary shares (ADSs).
