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Issuer Services
In order to establish any type of DR
program, the issuer assembles a team
of advisors that typically includes
investment bankers, lawyers and
accountants. The issuer also selects
a depositary bank, a key partner that
enlists the services of a local market
custodian and other key support
service providers to assist in the
implementation of the program.
Once the issuer and its advisors have
evaluated the company’s unique needs,
and have determined the type of DR
program best suited to its objectives,
the issuer and the depositary execute
a deposit agreement, a contract
which sets forth the terms of the DR
program. Based upon the contract, the
depositary performs certain specific
services on behalf of the issuer and
the DR holders. Many of these same
parties may play key roles in the
long-term development and day-to-
day management of the issuer’s DR
program; however, the depositary bank
will remain a critical liaison between
the issuer and brokers and investors,
while the functions of lawyers and
accountants become focused on
periodic reporting. In addition, the
investment bankers are typically not
involved with a DR program unless
the issuer is intending to go back to
the market.
Table 3: Roles in the Establishment of a DR program
Table 4: Roles in the ongoing development of a DR program
Roles and Relationships for the Issuer
and the Depositary
Role of depositary:
Role of issuer:
Issue and cancel DRs
Provide required certificates to the DR bank
and the issuance of DRs, if needed
Serve as registrar and transfer
agent for the DRs
Communicate with depositary regarding
the DR program including potential
program changes
Act as paying agent, processing
dividend payments or other
entitlements for DR holders
Pay dividends to local custodian for
transfer to the DR holders
Process corporate actions
Communicate with depositary on
corporate actions
Provide ongoing account management
support to the issuer
Ongoing regulatory reporting and filing
Coordinate proxy process for
DR holders
Communicate with depository for
shareholder services
Offer value-added services such as
investor relations counsel
Develop an investor relations plan
Role of depositary:
Role of issuer:
Consult on DR facility structure
Determine corporate and financial
objectives
Appoint custodian
Appoint depositary, legal counsel,
investment bank and accountants
Assist with DR requirements
Determine program type
Coordinate with lawyers and investment
bankers to ensure that all the
implementation steps are in place
Obtain approval from board of directors,
shareholders and regulators as needed
Prepare and issue DRs
Provide financial information to
accountants and advisors
Announce program establishment to
investor community
Develop an investor relations plan