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Citi Depositary Receipt Services
Unsponsored ADRs
Unlike traditional sponsored ADR programs, unsponsored
ADR programs are established by a depositary bank without
the direct involvement of the respective non-U.S. company,
provided that the company’s securities represented by the
ADR are either registered or qualify for an exemption from
Securities and Exchange Commission (SEC) registration.
An October 2008 SEC rule change simplified the manner in
which this exemption is obtained, making it automatically
available to many non-U.S. companies provided they meet
certain requirements.
As of June 2014, the total universe of unsponsored programs
available to investors is now 1,601 programs. Together,
Japan and the UK are the most active countries, constituting
26% of total unsponsored program count and 37% of total
unsponsored trading volume. Historically, unsponsored DR
liquidity was driven by Western European countries, but
the increase in Asia-Pacific unsponsored DR programs has
resulted in a nearly even distribution of liquidity between
Western Europe and Asia-Pacific.
In terms of industries, issuers from the Financial and
Consumer (Cyclical) sectors are the most active industry
sectors, constituting 23% of total unsponsored program
count and 17% of total unsponsored trading volume.
Compared to the same period last year, trading volumes of
unsponsored ADR programs increased by 400 million DRs
(or 48%) to almost 1.2 billion DRs in the first half of 2014. The
overall increase in unsponsored trading activity was driven
by programs from Japan, Greece, France and China, with
increases of 149 million DRs, 93 million DRs, 58 million DRs,
and 54 million DRs respectively.
Most industry sectors experienced increased unsponsored
DR trading volumes, with the majority of the increase coming
from Financials and Technology sectors, showing increases of
151 million DRs and 121 million DRs, respectively.
Unsponsored Programs
Number of Programs
1, 3
Trading Volume
2
Others
40%
Singapore
4%
France
4%
Germany
4%
Australia
6%
China
8%
Hong Kong
8%
U.K.
11%
Japan
15%
3
Others
11%
Sweden
2% Italy
3%
Germany
4%
Switzerland
4%
Hong Kong
4% UK
7%
Greece
8%
China
11%
France
15%
Japan
29%
Source: Bloomberg Financial Markets and Depositary Data Interchange
Source: Bloomberg Financial Markets and Depositary Data Interchange
Unsponsored Program Count: 1,601
Unsponsored Trading Volume: 1.2 billion DRs
1
The total count of 1,601 unsponsored DR programs is as of June 29, 2014.
2
Unsponsored DR trading volume as of June 29, 2014.
3
Unsponsored ADR programs represent “H shares” of companies from Mainland China that trade on the Hong Kong Exchange.