What is a depository bank?
Deposit Bank allows investors to hold and trade shares of companies based on the USA who trade in US financial markets. The use of deposit banks allows investment in N.S. Safer and easier management companies. These institutions also help to simplify various tax issues regarding cross -border trading. ADSS will decide between the bank and the company selling their shares. The ADR corresponds to the exact amount of ADS held by the shareholder. ADSS and ADR are therefore mechanisms for holding and trading shares traded by companies in America.
There are several types of ADR programs issued by a depository bank. These include an unnoticed share and limited sharing programs. The type of program used by the company issuing a stake is determined when it sets the program ADR.BEZ a formal agreement with the depository bank; In fact, more than one bank can issue shares. These shares are issued on the basis of market demand, which is also known as tradingwith a partition (OTC). If the shares have been issued more than one bank, then each bank deals only with issued shares and is not responsible for shares issued by other banks.
Uninitiated programs are divided into level I (OTC) programs, level II (listed) and level III (offering). ADR level I is the most popular, they include one transfer agent or depository, and requires a minimum amount of reporting to the US Securities and Stock Exchange Commission (SEC). Level II includes more regulation from SEC, but in exchange allows the company to bring its shares on the US Stock Exchange. The ADR level III programs include even stricter rules, but make it possible to save themselves in A. American depository bank and stocks' offers to increase capital.
Limited programs for US Deposit Bank are divided into 144-A and S regulations. These restrictions limit which can buy shares in the company. SEC Rule 144-A makes the share of issuingprivate affairs; Therefore, only qualified institutional buyers or QIBS can buy stocks. The S, also according to SEC, means that shares cannot be purchased by US citizens.
Depository Bank will help its US investors get dividends from their ADS. Dividend is the percentage of the company's earnings that are distributed among the company's investors. The size of the dividend depends on two factors: the amount of profits and the number of shares owned by the shareholder.
The deposit bank will also help the investor deal with capital gains and other taxes. This is essential for the investor, because the taxes of the selected country in which the company is founded may be unknown. Capital profits tax collected from profits achieved from the sale of non -invential assets such as stocks. Not all countries have a capital income tax.