ADRs (American Depositary Receipts) are certificates that represent shares of foreign companies and are traded on U.S. stock exchanges like the NYSE or Nasdaq, or on the Over-The-Counter (OTC) market. They allow investors to easily access companies outside the U.S. without having to operate directly in international markets.
How do ADRs work?
Instead of a foreign company listing its shares directly in the U.S. (a complex and expensive process), a U.S. bank purchases its shares in the local market and then issues dollar-denominated ADRs that represent those shares. These ADRs can be bought and sold like any regular U.S. stock.
At Hapi, you can invest in some selected ADRs, although not all ADRs available on the market are on the platform.
What are the benefits of ADRs?
International diversification: invest in foreign companies through U.S. markets.
Convenience: ADRs are traded in dollars like any U.S. stock, and no need for a foreign brokerage account.
Liquidity and cost: Being listed in U.S. markets means easier access and lower trading costs.
📌 Keep in mind that diversification does not guarantee returns or protect against losses in declining markets. All investments carry risks.
What are the fees associated with ADRs?
Some ADRs have periodic maintenance fees charged by the depositary bank (also known as “custody fees”). These fees are typically $0.02 to $0.05 per share and are charged if you hold the ADR on the record date.
Key dates:
Record date: If you hold the ADR on this date, the fee applies.
Process date: The date when the fee is debited from your Hapi account.
📌 Important: If the fee results in a negative balance, you may need to sell shares or deposit funds to avoid a margin call.
Still have questions?
If you want to know whether an ADR is available in Hapi or have questions about fees or how they work, reach out to us from the app. Our support team is here to help you.