An ADR is a negotiable United States (US) certificate representing ownership of shares in a non-US corporation. ADRs are quoted and traded in US dollars in the US securities market. Also, the dividends are paid to investor in US dollars. ADRs were specifically designed to facilitate the purchase, holding and sale of non-US securities by US investor, and to provide a corporate finance vehicle for non-US companies.
US investors generally prefer to purchase ADRs rather than ordinary shares in the issuer’s home market because ADRs trade, clear and settle according to US market conventions. One of ADRs’ main advantages is the facilitation of diversification into foreign securities. ADRs also allow easy comparison to securities of similar companies as well as access to price and trading information, if listed. ADR holders also appreciate dollar dividend payments and receiving corporate action notifications.
ADRs issuers are typically large multinational corporations. Any non-US company seeking to raise capital in the US or increase their base of US investor can issue ADRs.
Investors receive annual reports and proxy materials in English. ADR issuers generally have full information in English about themselves on their websites, as well as on the main depositary bank websites, and are better tracked by the main US financial websites. ADRs listed on US exchanges provide holders with the same level of information as any other US security. Trading information is readily available, financials are reconciled to US Generally Accepted Accounting Principles (GAAP), and the SEC regulates the Company’s disclosure to investor. Standard Bank’s ADRs are not listed on a US exchange, and Standard Bank does not provide US GAAP financial statements.
The ADRs are traded Over-The-Counter (OTC). The trading code is SGBLY. The CUSIP number is 853118206.The ratio between the ADR and the ordinary share is 1:1
New York
BNY Mellon
Depositary Receipts Division
240 Greenwich street
New York, New York 10286
Telephone: +1 212 815 4158
Fax: +1 212 571 3050
www.adrbnymellon.com
Vice President, Depository Receipts
Tatsiana Axenova
Phone: +1 (212) 815-4158
E-Mail: [email protected]
A registered holder is one whose name appears on the books of the depositary. The registered holder is considered the owner of record. A beneficial holder is one whose holdings are registered in a name other than their own, such as in the name of a broker, bank or nominee.
Dividends are paid in U.S. dollars and are generally taxable, just like dividends on U.S. shares. In addition, taxes may be withheld by the ADR company’s local government. Depending on individual circumstances, foreign taxes withheld might be applied as a credit against U.S. taxes, or tax reclaim opportunities may be offered.
For dividend and corporate action information, please visit www.adrbnymellon.com. Go to the Directory on the top left side of the screen, then choose Corporate Actions or DR Dividends & Distribution on the vertical scroll bar on the left and then enter company name, CUSIP or symbol.
Investors can purchase Depositary Receipts through Global BuyDIRECT a BNY Mellon-sponsored dividend reinvestment and direct purchase program for Depositary Receipts of certain non-U.S. companies. Each participating company’s plan allows its existing shareholders to use dividends paid by the company to automatically purchase Depositary Receipts. The plans also allow first-time and existing investors to purchase Depositary Receipts of participating companies. All such investments are made through BNY Mellon as transfer agent.
As a participant in Global BuyDIRECT, investors benefit from the direct ownership of their Depositary Receipts, the efficiency of receiving corporate communications directly from the Depositary Receipt issuer, and the savings resulting from reduced brokerage and transaction costs.
Global BuyDIRECT is a BNY Mellon-sponsored dividend reinvestment and direct purchase program for Depositary Receipts of certain non-US companies. Each participating company’s plan allows its existing shareholders to use dividends paid by the company to automatically purchase Depositary Receipts. The plans also allow first-time and existing investors to purchase Depositary Receipts of participating companies. All such investments are made through BNY Mellon as transfer agent.
As a participant in Global BuyDIRECT, investors benefit from the direct ownership of their Depositary Receipts, the efficiency of receiving corporate communications directly from the Depositary Receipt issuer, and the savings resulting from reduced brokerage and transaction costs.
Investors can always purchase Depositary Receipts through their own full-service, discount, and on-line brokerage firms throughout the US.
A shareholder wishing to convert JSE-listed ordinary shares into ADRs should, in the first instance, request that their broker contact the BNY Mellon ADR Broker Desk at [email protected]
Standard Bank has a Level 1 ADR programme in the US. BNY Mellon is the sponsoring bank, and the depositary receipts trade in the rOTC market.
Symbol:SGBLY
CUSIP:853118206
Exchange: OTC
Ratio: 1:1
Country: South Africa
Industry:Banks
Depositary: BNY Mellon (Sponsored)
Effective Date: 28 September 2012
Underlying ISIN: ZAE000109815
U.S. ISIN: US8531182066
Quick ADR facts
- ADRs are negotiable US securities that generally represent a company’s publicly traded equity or debt.
- They are publicly available to investors on a national stock exchange or in the OTC market.
- They facilitate U.S. investor purchases of non-US securities and allow non-US companies to have their stock trade in the United States by reducing or eliminating settlement delays, high transaction costs, and other potential inconveniences associated with international securities trading.
- They are treated in the same manner as other US securities for clearance, settlement, transfer, and ownership purposes. Depositary receipts can also represent debt securities or preferred stock.
- They can either be sold to another US investor or can be cancelled and the underlying shares can be sold to a non-US investor, when the depositary receipt holder sells.
ADRs facilitate portfolio diversification, risk reduction and international investment, overcoming many of the inherent operational and custodial hurdles of international investing.
There are three levels of ADR programmes:
- Sponsored Level I Depositary Receipts
This is the simplest method for companies to access the US and non-US capital markets and they are traded in the US over-the-counter (OTC) market. Level I is the fastest growing segment of the depositary receipt business. - Sponsored Level II and Sponsored Level III Depositary Receipts
Companies that wish to list their depositary receipts on a US stock exchange (NASDAQ, American or New York), raise capital or make an acquisition using securities, use Sponsored Level II or Sponsored Level III depositary receipts. These are exchange-listed securities but do not involve raising new capital. Level III programmes typically generate the most U.S. investor interest because capital is being raised.