In relation to American Depositary Receipts (ADRs), a local custodian bank (also known as a sub-custodian or agent bank) is a bank in a country outside the United States that holds the corresponding amount of shares of stock trading on the home stock market represented by an ADR trading in the U.S, with each multiple representing some multiple of the underlying foreign share. This multiple allows the ADRs to possess a price per share conventional for the US market (typically between $20 and $50 per share) even if the price of the foreign share is unconventional when converted to US dollars directly. This bank acts as custodian bank for the company that issues the ADRs in the U.S. stock.
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Famous quotes containing the words local, custodian and/or bank:
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Back now, all of them, to their local lives....”
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—Marshall McLuhan (1911–1980)
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And limbed and lighted out from bank to bank.
That’s how the stars shine during the day.”
—Wallace Stevens (1879–1955)