ADR & International OTCQX
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What is an ADR?
- A Depositary Receipt (DR) is a tradable instrument that represents ownership of equity shares in a foreign issuer. The DRs trading in the U.S. are called American Depositary Receipts (ADRs). Each issued DR represents a certain number of the underlying ordinary shares of the issuer, with such underlying shares held in custody by a depository institution (e.g. Bank of New York Mellon). The ADRs are considered U.S. domestic securities, making it easier for U.S. investors to invest in non-U.S. companies.
Which ADR program has FSL Trust established?
- FSL Trust has established a Level 1 ADR program. The Level 1 ADR program has minimal SEC registration requirements and no requirement for Sarbanes-Oxley compliance.
In what currency are the ADRs be quoted?
- The ADRs will be quoted in U.S. dollars.
What is International OTCQXSM?
- OTCQX is the premier market tier for non-U.S. companies that trade over-the-counter and are listed on qualified foreign stock exchanges. OTCQX provides an efficient platform for non-U.S. listed companies to access the U.S. markets.
There are two tiers for OTCQXSM, namely PrimeQXSM and PremierQXSM tiers, and registration under the PrimeQXSM tier will allow non-U.S. companies access to the U.S. capital markets without the associated costs and burdens of a traditional U.S. exchange listing and compliance to the SEC and Sarbanes-Oxley requirements.
Which other companies have their ADRs quoted on International OTCQX?
- International companies which have their ADRs quoted on International OTCQX include Marks & Spencer, Roche, BASF, Adidas Group, Akzo Nobel and Air France-KLM. A more detailed list can be found on OTCQX website at http://www.otcqx.com/otcqx/securityList.
Where can I find more information on the ADRs and OTCQX?
- You can find out more about OTCQX and ADR at http://www.otcqx.com and www.adr.com respectively. However, FSL Trust bears no responsibility for the content posted on these sites.
How would FSL Trust benefit from ADR program and its quotation on OTCQX?
- The ADRs are considered U.S. domestic securities. Hence the ADR program makes it easier for U.S. investors to invest in FSL Trust, particularly institutional investors restricted to investing in only U.S.-based securities. Over time, we expect the ADR program to improve FSL Trust's trading liquidity and expand its base of unitholders. The ADR program is also expected to enhance FSL Trust's ability to obtain research coverage among sell-side analysts based in the United States.
International OTCQX is well recognized among the U.S. investment community, which helps to distinguish FSL Trust's ADR program from the approximately 8,000 OTC securities currently traded in the United States.
Is the ADR quotation on OTCQX considered another listing for FSL Trust?
- No. The ADR quotation on OTCQX complements FSL Trust's core listing on the Singapore Exchange (SGX) by making it easier for U.S. investors to invest in FSL Trust.
When did FSL Trust's ADRs commence trading on OTCQX?
- FSL Trust's ADRs commenced trading on OTCQX on 29 October 2008.
Does the quotation of the ADRs on OTCQX dilute my current unit holding in FSL Trust?
- No. The proposed quotation of FSL Trust's ADRs on OTCQX is non-dilutive for existing unitholders as no new or additional units are issued. Each ADR is represented by 10 underlying FSL Trust units listed on the Singapore Exchange (SGX-ST).
How can I track the share price and volume of FSL Trust's ADRs?
- Investors can go to the OTCQX website at http://www.otcqx.com to obtain the ADR quotation and related trading statistics. The Ticker is FSHPY.
Are ADR holders eligible to receive distributions from FSL Trust? How will they receive their distributions?
- Yes. ADR holders will receive their distributions (less relevant fees) from the Bank of New York Mellon subject to the terms of the Deposit Agreement (which sets out the terms for the establishment of the ADR program).
Do ADR holders receive notices of distributions and annual reports?
- ADR holders may refer to FSL Trust's website at www.firstshipleasetrust.com for notices of distributions and annual reports and may also sign up at the same website for email alerts.
How would a U.S. investor benefit from trading ADRs on OTCQX as compared to trading directly on the Singapore Exchange (SGX) through a U.S. brokerage?
- Many institutional investors in the U.S. are restricted from purchasing shares or units in companies that do not trade in the U.S. By effectively addressing this issue, OTCQX will significantly increase the opportunity among high-quality, U.S.-based investors to purchase units in FSL Trust.