A depository bank is a bank that manages the administration of American Depository Receipts or ADRs. These receipts are US-based shares of foreign corporation that have met certain requirements to be able to sell their shares in the US. Depository banks also arrange for custodians to accept deposit of shares, maintain the register of holders and distribute dividends in US dollars.

An ADR is a receipt that a depository bank holds for US investors indicating a claim on a specific number of shares in a foreign corporation that trades on a US stock exchange. Depository Banks have a lot of responsibility towards the holder of an ADR and to the non-US company the ADR represents. Some important features of a depository bank are:

1. Various means of accessing a shareholder's account.

2. The vast amount of information available concerning depository receipts.

3. Availability of expert advice.

Action Steps
The best contacts and resources to help you get it done

Invest with depository banks leaders

There are financial institutions that are leaders in assisting people in investing in companies overseas. Many of them are depository banks because they manage American depository receipts.

I recommend: JP Morgan Chase is one of the leading depository banks with a site that allows you to conduct depository receipt searches, review market overviews and is a means of managing your depository receipts. The Bank of New York Mellon is another depository receipts market leader and has a website that has extensive information on depository receipts.

Consult experts for depository banks advice

You can find a depository banks consultant at financial institutions that manages shareholders investment in foreign companies. These will have investment experts to help with depository banks. The experts will give you assistance with depository banks that are managing American depository receipts.

I recommend: The Security and Exchange Commission protects investors and maintains orderly markets and facilitate capital formation. It provides assistance with investments, answering any question you might have and providing you with any necessary documentation. Charles Schwab global investment services has experts on American Depository Receipts.

Use depository receipt literature to gain understanding of depository banks

Books are a valuable asset in your depository banks training. Many depository banks will have every information you need to know about American depository receipts. There are also separate entities that provide books on the ins and out of depository receipts, which is key in depository banks.

I recommend: CitiBank, which is also a depository bank, has a book titled 2005 DR Information Guide that provides an overview of how the depository market works and has been a reference guide for issuers, investors and other market participants. McGraw Hill has as handbook entitled Handbook of American Depository Receipts that gives you information on depository receipts and depository banks.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  You should check your local bank because many banking institutions provide investment help and manage ADRs. They do not necessarily call themselves depository banks, but they are because they assist people in buying shares from companies overseas through ADRs.