ADR

American Depositary Receipt (ADR) describes the US-listed depositary instrument representing ownership of an underlying non-US-listed equity security. ADRs operate under US securities law as US-listed securities while economically representing the underlying foreign equity.

ADRs operate at three structural levels:

— Level I (over-the-counter, no SEC registration of underlying issuer): limited US disclosure obligations — Level II (US exchange listing, SEC registration of underlying issuer): structured US disclosure obligations — Level III (US exchange listing with US public offering): fullest US disclosure and registration architecture

Major Israeli ADR programs include the five Israeli bank ADRs (Bank Leumi, Bank Hapoalim, Mizrahi-Tefahot, Bank Discount, First International), Teva Pharmaceutical Industries (NYSE: TEVA), ICL Group (NYSE: ICL), and selected additional positions.

Israeli-domiciled companies listing on NASDAQ or NYSE more commonly operate through dual primary listing structures or through US-headquartered subsidiary structures rather than through ADR programs. The Israeli technology sector specifically tends to operate through US-incorporated parent entities with substantial Israeli operating subsidiaries (the Delaware C-Corp structure) rather than through ADR architecture.

See also: /glossary/dual-primary-listing/, /glossary/foreign-private-issuer/, /diaspora-investment/israeli-adr-universe/