American Depository Receipt Custody Fees

What is ADR?

American Depositary Receipt ("ADR") refers to a negotiable certificate issued by U.S. commercial banks to facilitate the trading of foreign securities in the U.S. stock market. This certificate represents a specified number of shares of non-U.S. companies that are held by a U.S. bank, which in turn issues ADRs representing the shares, but not necessarily at a 1:1 ratio; for example, 5 shares of a company may represent only 1 share of ADR.

How are ADR custody fees charged?

The Depository Trust Company (DTC) began charging brokerages or clearing firms for custody fees in 2008, which in turn charged investors who hold ADRs. This fee is therefore known as the “ADR custody fee”.

ADR custody fees

ADR custody fees range from 1 to 5 cents per share on average. The amount and timing of the fees charged vary by ADR. Please refer to the individual ADR prospectus for specific information or search online through the EDGAR search tool.

ADR custody fees are charged 1 to 4 times per year normally, the frequency might be be higher under special circumstances. The charge amount will be split accordingly. For example, if the annual ADR custody fee is 2 cents and the charging frequency is 4 times a year, 0.5 cents will be charged each time.

Search for ADR stocks

In general, non-U.S. companies trading in the U.S. secondary market may charge ADR fees.

Click here to view more information, as shown below.

ADR deduction details

ADR deduction details can be viewed by launching the Longbridge App – “Portfolio” – “More” – “Funds Details”.