ADR - Frequently Asked Questions
What is an American Depositary Receipt and an American Depositary Share?
An American Depositary Receipt (“ADR”) is a negotiable U.S. dollar-denominated receipt that represents an American Depositary Share (“ADS”). The ADS, in turn, represents an indirect ownership interest in shares of a non-U.S. company. ADSs are issued by a U.S. depositary bank (which is a bank in the United States that oversees the stock transfer and agency services in connection with a depositary receipt programme) and represent a certain number or portion of ordinary share(s) deposited with the depositary bank. ADSs are created under, and rights of ADS holders are governed by, a deposit agreement. ADSs were specifically designed to facilitate the purchase, holding and sale of non-U.S. equity securities by U.S. investors.
What are the benefits of ADSs to U.S. investors?
ADSs are quoted and traded in U.S. dollars in the U.S. securities market. Any dividend payments declared by the issuer are paid by the depositary to ADS holders in U.S. dollars. Certain U.S. investors prefer to purchase ADSs rather than ordinary shares in the issuer's home market because ADSs trade, clear and settle according to U.S. market conventions. ADSs allow easy comparison to securities of similar companies, as well as access to price and trading information. Fees are assessed in respect of dividend payments and various other actions, and deducted from payments.
What is a sponsored Level I ADR programme?
In a Level I ADR programme, the ADSs are not listed on a U.S. stock exchange and can only be traded in the U.S. over-the-counter markets (as opposed to Level II ADR programmes, for example, the ADS for which trade on a U.S. stock exchange). Issuers such as Swiss Re whose underlying shares are represented by Level I ADRs are not subject to the reporting requirements of the U.S. Securities and Exchange Commission (“SEC”) and, therefore, do not have SEC reporting obligations.
How can I buy or sell Swiss Re ADSs?
You can buy or sell Swiss Re ADSs though a U.S. broker, just as you would buy or sell other U.S. securities.
How do I convert my Swiss Re shares into Swiss Re ADSs?
Converting shares into ADSs (which involves the surrender of Swiss Re shares against the delivery of ADRs representing ADSs) must be done through a broker, an investment advisor or Deutsche Bank Trust Company Americas (as depositary bank). These conversions are subject to payment of fees.
Where are Swiss Re ADSs traded?
Swiss Re ADSs are traded in the U.S. over-the-counter (OTC) markets (see below for details).
| Symbol | SSREY |
|---|---|
| CUSIP | 870886108 |
| Platform | OTC |
| Ratio | 1 Swiss Re ADR : 0.25 Swiss Re share |
| Country | Switzerland |
| Industry | Non-life insurance |
| Depositary | Deutsche Bank (Sponsored) |
| Underlying ISIN | CH0126881561 |
| U.S. ISIN | US8708861088 |
What is the difference between a registered ADS holder, a beneficial ADS holder and a Swiss Re shareholder?
A registered holder is one whose name appears on the books of the depositary bank, in its capacity as registrar. The registered holder is considered the owner of record. A beneficial holder is one whose holdings are registered in a name other than their own, such as in the name of a broker, bank or nominee. Note in any case that neither a registered ADS holder nor a beneficial ADS holder is a Swiss Re shareholder. The Swiss Re shares underlying the ADSs in the Swiss Re ADR programme are held by a custodian for the depositary bank.
What is the ratio of ADS to underlying Swiss Re shares?
Since June 15th 2015 every Swiss Re ADS represents one quarter of a Swiss Re share. Prior to close of business on June 12th 2015, one ADS represented one Swiss Re share.
I was an ADS holder prior to the ratio change. What happened to my existing ADSs when the ratio changed?
ADS holders of record at the close of business on Friday June 12th 2015 received an additional three ADSs for each ADSs held. For example, if an investor held 100 ADSs prior to the change in ratio, such an investor will hold 400 ADSs following the change in ratio. Therefore the number of underlying Swiss Re shares remains unchanged. ADRs representing ADS following the ratio change were distributed on Monday June 15th 2015.
Did the ratio change dilute my investment in Swiss Re?
No. Existing ADS holders received additional ADSs when the ratio changed. Therefore the number of underlying Swiss Re shares remained unchanged.
Why did the ADS ratio change?
Changing the ratio brought the trading price of Swiss Re’s ADS more in line with typical trading prices of U.S. securities.