What Is an American Depositary Receipt - ADR?

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An American depositary receipt (ADR) is a negotiable certificate issued by a U.S. depository bank representing a specified number of shares-often one share-of a foreign company's stock. The ADR trades on U.S. stock markets as any domestic shares would.

ADRs offer U.S. investors a way to purchase stock in overseas companies that would not be available otherwise. Foreign firms also benefit, as ADRs enable them to attract American investors and capital without the hassle and expense of listing on U.S. stock exchanges.