American Depositary Receipt Law and Legal Definition

An American depositary receipt (ADR) is a negotiable certificate issued by a U.S. bank representing a specific number of shares of a foreign stock traded on a U.S. stock exchange. ADRs make it easier for Americans to invest in foreign companies. ADRs enable investors to invest in non-US securities without concern for often complex and expensive cross-border transactions, and offer substantially the same economic, corporate and voting rights enjoyed by domestic shareholders of the non-US issuer. ADRs are considered US securities.