CFA Level I · CFA Level I Exam · Equity Instrument Features
Compared with a sponsored depository receipt program, an unsponsored program is most likely to:
An unsponsored program is most likely to be set up by depository banks without the issuer's participation. The issuer is not party to the deposit agreement, so it has little control over terms, and holders usually have fewer shareholder rights than under a sponsored program.
- Agive the issuer control over the terms of the program
- Bbe set up by depository banks without the issuer's participationCorrect
- Cprovide the investor with the same voting rights as the issuer's shareholders
Explanation
Unsponsored receipts are created by depository banks in response to investor demand, without the issuer's involvement. In a sponsored program the issuer is a party to the deposit agreement and has more control, and shareholder rights are usually clearer. Unsponsored holders generally have fewer rights.
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