American depository receipt

What does American depository receipt mean in American Law?

The definition of American depository receipt in the law of the United States, as defined by the lexicographer Arthur Leff in his legal dictionary is:

Usually referred to as ADR. A document evidencing the ownership by an American of a specific number of shares in a foreign, e.g., French, corporation. The actual shares are held by a European bank acting as agent of an American bank which issues the ADR. The whole arrangement is to avoid the need for complex transfers of actual

stock certificates when the foreign shares are traded, thereby facilitating the liquidity of the investment.

Meaning of American Depository Receipt

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