Date of Defense



Finance and Commercial Law

First Advisor

Dr. Christopher Korth

Second Advisor

John Stephens

Third Advisor

Dr. Ed Edwards


The American depositary receipt (ADR) is a dollar-denominated certificate that represents claim to non-U.S. securities held overseas. ADRs allow foreign companies access to the American market in a unique format. The underlying security is held at a custodial depository institution located in the country of issuance. However, a U.S. commercial bank issues the ADR.

American depositary receipts, also referred to as American depository receipts, are not new financial instruments, but only became prominent during the last two decades. ADRs were first created in 1927 by the Guaranty Trust Company (the predecessor to Morgan Guaranty Trust) to overcome barriers in England, and allow investment by Americans in British securities. Like many aspects of global finance, ADRs were inhibited by the Cold War for almost thirty-five years. It was not until the integration of global markets began in the late 1960's and early 1970's that ADRs started to significantly emerge.

ADRs can be traded on the New York Stock Exchange (NYSE), National Association of Security Dealers Automated Quotation System (NASDAQ), American Stock Exchange (AMEX), or over-the-counter (OTC) depending on the type of listing. The ADR ratio is quoted as the number of shares to number of ADRs: for example, a quotation of 1:10 indicates one share of the underlying security equals ten American depositary receipts. ADR ratios vary. For example, the ADR ratio for the Japanese photo company Fuji is 1:1, whereas the ADR ratio for the Philippine based United Paragon Mining Corporation is 1:5000. The ratio for the Swiss food company, Nestle S.A., is 20:1.

Access Setting

Honors Thesis-Campus Only