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CFA Level I · CFA Level I Exam · Equity Jurisdictions, Classes, and the Voting Process

Compared with a sponsored Level III American depositary receipt (ADR) program, an unsponsored ADR program is most likely to:

An unsponsored ADR is most likely created by a depositary bank without the foreign company's participation. The company is not involved, and the depositary typically retains voting rights. Sponsored programs, particularly Level III, involve the issuer and can be used to raise capital.

  1. Abe issued with the foreign company's full involvement and capital raising
  2. Bcarry voting rights directly exercisable by the holder at the company's meetings
  3. Cbe created by a depositary bank without the foreign company's participationCorrect

Explanation

In an unsponsored program the depositary bank creates the receipts without the issuer's involvement, and the bank usually keeps the voting rights. Sponsored programs involve the company in the arrangement, and Level III programs are used to raise capital.

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