Conversions of ADRs into ordinary shares

An American Depository Receipt (ADR) is a financial instrument that is traded like a share but consists of ordinary shares of a foreign company.

Customers holding supported ADRs (as listed below) can now use CapTrader/IB's Voluntary Election Tool to convert ADRs into the corresponding ordinary shares.

ADRs provide a practical and cost-effective way to acquire foreign equities without incurring foreign tax liabilities. While ADRs generally follow the prices of the underlying foreign stocks, there can be a divergence in prices in some circumstances, creating arbitrage opportunities. CapTrader/IB's corporate action tool allows you to convert your ADRs into the underlying foreign equities using a simple process.

Please note that the number of ordinary shares that make up an ADR varies. The ratio of shares to ADR is indicated by the ADR ratio. For example, the ADR ratio for the ADR "RDS A" is 2:1, i.e. two ordinary shares per ADR. Thus, if this share is at a price of USD 35.00, the ADR is most likely to be priced in the USD 70.00 range.

Clients who wish to convert their ADRs into the underlying shares, for example to take advantage of arbitrage opportunities, can now use the corporate action tool in account management to manage this process.

Log in to Account Management to open the Voluntary Corporate Action tool. A list of ADRs for which conversion is offered can be found on this page below: "Supported ADRs".

For unsupported ADRs, you can send a request ticket via the customer service message center in account management.

Supported ADRs