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.
Read more about this topic: Custodian Bank
Famous quotes containing the words local, custodian and/or bank:
“Surely there must be some way to find a husband or, for that matter, merely an escort, without sacrificing one’s privacy, self-respect, and interior decorating scheme. For example, men could be imported from the developing countries, many parts of which are suffering from a man excess, at least in relation to local food supply.”
—Barbara Ehrenreich (b. 1941)
“The school system, custodian of print culture, has no place for the rugged individual. It is, indeed, the homogenizing hopper into which we toss our integral tots for processing.”
—Marshall McLuhan (1911–1980)
“O Gold! I still prefer thee unto paper,
Which makes bank credit like a bark of vapour.”
—George Gordon Noel Byron (1788–1824)