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

Under a sponsored depository receipt program, compared with an unsponsored program, the issuer of the underlying shares is most likely to:

In a sponsored program the issuer enters an agreement with the depositary bank, and receipt holders generally gain more rights, such as voting, along with issuer disclosure. Unsponsored receipts are created without issuer participation, so the issuer has no obligations and holders receive fewer rights.

  1. Ahave no involvement and bear no obligations to receipt holders
  2. Bhave shareholder voting rights passed to the depositary bank only
  3. Center an agreement with the depositary and provide receipt holders with greater rights and informationCorrect

Explanation

In sponsored programs the issuer agrees with the depositary, and receipt holders typically get shareholder rights such as voting and the issuer provides disclosures. Unsponsored programs are set up by the depositary without issuer involvement and give holders fewer rights.

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