ADR’s are issued in co-operation with the underlying foreign company whose equity shares will underly the ADR shares. With the corporation’s sponsorship, the ADRs created in the issue usually afford their owners the same rights normally given to stockholders, such as voting rights. For an ADR issue to become listed and trade on a major U.S. exchange, it must be sponsored by the underlying corporation. If not, the ADR issue is likely to be traded over the counter.

Unsponsored ADR

An American depositary receipt (ADR) that is issued without the involvement of the foreign company whose stock underlies the ADR. Shareholder benefits, voting rights and other attached rights may not be extended to the holders of these particular securities. These securities generally trade over-the-counter rather than on the NASDAQ or NYSE.

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