American Depositary Receipts (ADRs), also known as depositary receipts or stock certificates. It refers to transferable certificates representing the securities of foreign companies circulating in a country's securities market, where the securities can be stocks or bonds. American Depositary Receipts (ADRs) are depositary receipts issued to US investors and traded on the US securities market. The certificate, transfer, and settlement process of American Depositary Securities are the same as those of American securities. Alibaba, JD, Baidu, NetEase and other Internet giants that we are familiar with all use the method of issuing ADRs to raise funds when they go public in the United States.
American Depositary Receipts allow American investors to buy and sell stocks of foreign listed companies without cross-border transactions, which are all denominated in US dollars and pay dividends in US dollars.
Schematic diagram of ADR issuance process
