An American Depositary Receipt (ADR) is a certificate issued by a U.S. bank that represents shares in foreign stock. ADRs are subject to periodic fees that are intended to compensate the agent bank that is providing custodial services on behalf of the ADR. Custodial services normally include inventorying the foreign stocks underlying the ADR and managing all registration, compliance and record-keeping services.
In 2009, the Depository Trust Company (DTC) received approval from the US Securities & Exchange Commission to begin to collect these fees on behalf of the agent banks for ADRs which do not pay periodic dividends. DTC collects these fees from its participant brokers, including DriveWealth, that hold the ADRs for customers; these fees are collected by the broker from its customers as “pass-through fees”.
The amount of the ADR fee will tend to range from $0.02 - $0.05 per share per year, the amount varying by ADR. Please refer to the ADR prospectus for more information on the ADR Fee.