American Depository Receipt (ADR)

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Definition: American Depository Receipt (ADR)

American Depository Receipt (ADR) is a negotiable investment instrument traded in the US market with an underlying as the stocks of a company which does not have operations in the US but its stocks are traded on the US markets.

ADRs are treated and traded exactly as the stocks of a US domicile company and also pay dividends and are denominated in USD.

The shares of the company underlying in an ADR are referred to as the American Depository Shares (ADS).

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