This episode offers a comprehensive overview of American Depositary Receipts (ADRs), explaining their purpose as a means for U.S. investors to trade shares of non-U.S. companies. It details how depositary banks facilitate the creation and management of ADRs, including currency conversion for dividends, and outlines the different levels of ADR programs (Level I, II, and III) based on U.S. market access and SEC reporting requirements. The sources also discuss the advantages and disadvantages of investing in ADRs, such as diversification benefits versus currency and regulatory risks, and provide case studies of prominent Chinese companies like Alibaba (BABA), Didi Global (DIDIY), and Tencent (TCEHY) to illustrate diverse ADR structures and real-world implications, including delisting risks. Ultimately, the information emphasizes the need for thorough due diligence given the complexities and evolving nature of the global ADR market.

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