could face double taxation
limited selection of companiesunsponsored adrs may not be sec compliantinvestors may incur currency conversion feeshistory of american depositary receiptsbefore american depositary receipts were introduced in the 1920s american investors who wanted shares of a non u s listed company could only do so on international exchanges an unrealistic option for the average person back then adrs were developed because of the complexities of buying shares in foreign countries and the difficulties associated with trading at different prices and currency values j p morgan s jpm predecessor guaranty trust pioneered the adr concept in 1927 it launched the first adr enabling u s investors to buy shares of famous british retailer selfridges and helping the luxury depart store to tap into global markets the adr was listed on the new york curb exchange 4a few years later in 1931 the bank introduced the first sponsored adr for the british music company electrical musical industries the eventual home of the beatles today j p morgan and bny mellon another u s bank continue to be actively involved in the adr markets 5real world example of adrsbetween 1988 and 2018 german car manufacturer volkswagen ag traded otc in the u s as a sponsored adr under the ticker vlkay in august 2018 volkswagen terminated its adr program 6 one day after the termination j p morgan established an unsponsored adr for volkswagen trading under the ticker vwagy 7investors who held the old vlkay adrs had the option of cashing out exchanging the adrs for actual shares of volkswagen stock trading on german exchanges or exchanging them for the new vwagy adrs if i own an adr is it the same as owning shares in the company adrs are u s dollar denominated certificates that trade on american stock exchanges and track the price of a foreign company s domestic shares adrs represent the prices of those shares but do not grant you ownership rights as common stock typically does 