International Investing: ADRs & ORDs

Scottrade offers a wide selection of foreign investment opportunities, which include American Depositary Receipts (ADRs), Ordinary shares (ORDs), exchange-traded ADRs and direct investment in Canadian markets.


ADRs are receipts for foreign shares. A foreign company can deposit shares into an American bank. The bank then issues receipts, or ADRs, on their behalf.

ADRs may not have a 1:1 ratio with the corresponding foreign shares; instead, a single ADR may represent a group of foreign shares held by the bank. If dividends are issued in the company's country of operation, the dividends from that market are deposited in the bank, and the bank converts the money to U.S. dollars and distributes it to holders of ADRs.

Tax treatment of ADRs is the same as U.S.-listed securities with the exception of potential foreign withholding taxes. ADRs may be subject to a withholding tax from the security's home market on any income distributions, such as dividends or sale proceeds. This tax will be taken from the dividend or sale proceeds prior to the distribution of funds to the customer.

Not all ADRs are regulated the same way. Some ADRs are listed on U.S. exchanges and are subject to the same standards and regulations as American companies, but others are traded over-the-counter or on the 'grey market'.

Scottrade offers ADRs for companies in more than 20 countries including Australia, Belgium, Brazil, Canada, Denmark, France, Germany, Hong Kong, Ireland, Italy, Japan, Mexico, Netherlands, New Zealand, Norway, Philippines, Portugal, Singapore, South Africa, Sweden, Switzerland, Thailand and the UK.


The ordinary shares of foreign-based companies are not officially listed on American exchanges, but they can still be traded through a brokerage firm that is associated with the company's home market. All Canadian securities available to Scottrade customers are traded as ORDs.

ORDs have a 1:1 ratio between the home market security and the ordinary share issued in the U.S. ORDs can pay dividends, and they are taxed the same way as ADR securities.

Trading ADRs and ORDs listed in the Grey Market

Available ADRs and ORDs can be traded the same way as U.S.-listed stocks on the Scottrade Trading Site. For help entering an order, visit the Placing Stock Orders section of the Knowledge Center or contact your local branch office.

The primary difference between trading ADRs and ORDs and trading other stocks is that only certain order types are allowed. These are:

Online or Broker-Assisted

- Limit Order

  • All or None
  • Day
  • Good till Cancelled
  • Good till Date (Online ONLY)

Broker-Assisted Only

-Market Order - Sell Only

- Stop-Limit Order

Please note: The majority of orders entered by a broker will be charged the broker-assisted commission rate. These rules follow the current Scottrade order rules for OTC Bulletin Board and PINK Sheet securities. The grey market is an 'indications only market'.

When trading ADRs and ORDs, it's also important to look at the symbol to make sure you know what you're trading. All ADRs and ORDs traded in the OTC or grey market will have five-letter symbols and end in the letter F or Y. If the last letter of the symbol is F, that indicates an ORD, and if the last letter is Y, that indicates an ADR.

Trading Exchange-Listed ADRs

All exchange-listed U.S. foreign stocks will only be available in the form of an ADR. Exchange-listed ADRs do not follow the same symbology rules as the OTC and grey markets (i.e., these ADRs do not have to be five characters in length and end with the letter Y).

Exchange-listed ADRs trade the same way as all other exchange-listed stocks. For help entering an order, visit the Placing Stock Orders section of the Knowledge Center or contact your local branch office.

One key difference between exchange-listed ADRs and grey market ADRs is the allowed order types. Exchange-listed ADRs may be traded online or through your broker, and all available order types at Scottrade are permitted for these securities.

Direct Investing in Canadian Markets

Scottrade allows direct investment in any Canadian securities that do not already have an ADR or ORD listing at Scottrade. Please contact your local branch if you are unsure whether the Canadian stock you're wanting to trade is offered at Scottrade through an ADR or ORD already.

The allowed order types for direct foreign are as follows:

Broker-Assisted Only

- Market Order

- Limit Order

  • All or None
  • Day
  • Good til Cancelled

- Stop Order

Please note: All trades placed directly in Canadian markets must be placed through a broker.

When investing directly in Canadian markets, investors should be prepared to pay Canadian agency fees in addition to the broker-assisted trade commission at Scottrade.

For more information on commission rates for direct foreign investing, please see the Brokerage Commission Schedule on

Special Risk Factors of International Investing

Although you take risks when you invest in any stock or security, international investing has some special risks.These special risks include changes in currency exchange rates; political, economic and social events; potential for illiquid markets; less information; reliance on foreign legal remedies; and different market structures and operations.

There are different ways you can invest internationally: through mutual funds, exchange traded funds (ETF), American Depositary Receipts ('ADR' or 'ADS'),U.S.-traded foreign stocks, or direct investments in foreign markets. Learn more about international investing from a brochure from the U.S. Securities & Exchange Commission ('SEC') entitled 'International Investing Get the Facts' at

For mutual funds, you can get the prospectus for a particular mutual fund directly from the mutual fund. For ETFs, you can get additional information for a particular ETF from the ETF or from the exchange where the ETF is traded. Although most foreign stocks trade in the U.S. markets as ADRs, some foreign stocks trade here in the same form as in their local market.

There are different trading markets in the United States, and the information available about an ADR or foreign stock will depend on where it trades.

If the trading market is the New York Stock Exchange (NYSE), NYSE Amex, the NASDAQ Stock Market, regional exchange or OTC Bulletin Board (OTCBB) market, the foreign companies file annual reports with the SEC, as well as other information available in their home countries. Annual reports contain financial statements audited by independent accountants using U. S. audit standards. The financial statements either will be prepared using U.S. accounting principles or will show what the key results would have been under U.S. accounting principles. This makes it easier to compare a company's financial position to similar U.S. companies. The shares of hundreds of foreign companies trade in these markets, usually as ADRs. If the trading market for the ADR or U.S. traded foreign stock is the over-the-counter (or OTC not to be confused with the OTCBB) market, these companies generally have not registered with the SEC, and they publish information in a foreign language based solely on foreign requirements, including different accounting and auditing policies. The OTC market is much less liquid than other U.S. securities markets, so it may be difficult to execute trades at favorable prices. In addition, the executing broker-dealer to whom we send your order may execute your order on a net basis, which means that the executing broker-dealer may purchase the security for its own account in the foreign country in the foreign currency and then sell the security to execute your order at a higher price that includes the cost of currency conversion, fees, taxes, etc. Most foreign companies trading in the OTC market have not registered with the SEC. These companies may not let U.S. shareholders participate in offerings of new shares, such as rights offers to existing shareholders, because that would require SEC registration. If you want to buy or sell stock in a company on the foreign market directly, Scottrade may be able to process your order for you. Foreign markets often operate differently from U.S. trading markets. For example, there may be different periods for clearance and settlement of securities transactions. Some foreign markets may not report stock trades as quickly as U.S. markets. Rules providing for the safekeeping of shares held by custodian banks or depositories may not be as well developed in some foreign markets, with the risk that your shares may not be protected if the custodian has credit problems or fails. International investing can be more expensive than investing in U.S. companies, including transaction costs such as currency exchange, fees and taxes.