An American Depositary Receipt (ADR) is a negotiable certificate that represents ownership of a certain number of shares in a foreign company. It is a financial instrument that allows investors in the United States to invest in foreign companies without having to deal with the complexities of foreign markets and currencies. ADRs are issued by US depository banks that hold the underlying foreign company shares in custody. They trade on US stock exchanges like regular stocks, and their value is based on the value of the foreign companys shares in their home market. ADRs allow US investors to buy and sell shares of foreign companies on US exchanges. They are issued by American banks or brokers and represent one or more shares of foreign-company stock held by that bank in the home stock market of the foreign company. The ratio of foreign shares to one ADR will vary from company to company, but each ADR for any one company will represent the same number of shares. ADRs may be listed on a major exchange such as the New York Stock Exchange or may be traded over the counter (OTC).