Depository Bank Law and Legal Definition
Depository bank is a bank holding American Depositary Shares (ADSs), or shares of corporations based outside the U S, and sells American Depositary Receipts (ADRs) to US investors. The bank provides all the stock transfer and agency services in connection with a depository receipt program.
Depository bank functions by:
- arranging for a custodian to accept deposits of ordinary shares;
- issuing the negotiable receipts which back up the shares;
- maintaining the register of holders to reflect all transfers; and
- exchanging, and distributing dividends.
