AMERICAN DEPOSITARY SHARE - ADS

US-dollar denominated equity share of a foreign-based firm available for purchase on a US stock exchange. Depository banks issue these shares under agreement with the issuing foreign nation. The whole insurance is called the American Depositary Receipt (ADR) while the individual shares are referred to as ADSs.

Depending on the extent of compliance with US securities regulations the foreign firm desires to abide, it may either list its stocks over-the-counter with minimal reporting requirements or on a key exchange such as the Nasdaq and NYSE. Listings on major exchanges usually require the similar level of reporting as domestic corporations, and also mandate adherence to GAAP accounting rules.