SEC Issues Guidance to Investors on ADRs

In an Investor Bulletin, the SEC Office of Investor Education and Advocacy ("OIEA") explained that an American Depository Receipt ("ADR") is a "security that represents shares of non-U.S. companies that are held by a U.S. depositary bank outside the United States." The OIEA observed that ADRs (i) permit U.S. investors to invest in non-U.S. companies and simultaneously (ii) provide non-U.S. companies with easier access to the U.S. capital markets. The OIEA outlined the fees that are charged to ADR investors, and explained the steps that an investor should take before choosing ADRs, including (i) asking their broker-dealers what fees will be assessed, and (ii) reviewing all fees reported in the Form F-6 registration statement under the Securities Act, which is available through the SEC's website.