American Depository Receipt FAQs
American Depository Receipt FAQs
IperionX’s listed ADRs are traded on NASDAQ with ticker IPX.
American Depositary Receipts (ADRs) are negotiable U.S. securities issued by a U.S. bank, referred to as a “depositary bank,” that typically represent a non-U.S. company’s equity. ADRs trade freely in global markets and facilitate cross-border trading.
ADRs allow non-U.S. companies to make their shares available outside their home markets and allow investors in the U.S. and elsewhere to easily invest in companies on a more global basis.
An ADR program often uses a ratio to reflect a USD price which will differ to its primary home market. One reason being, it ensures the ADR price is relevant to the wider market, including institutional shareholders who have investment mandate considerations.
An ADR ratio provides the number of underlying shares represented by one ADR. One (1) IperionX ADR represents ten (10) ordinary IPX shares on the Australian Securities Exchange (ASX). The two securities trade very close to parity once the ADR ratio and foreign exchange aspects are accounted for.
Investors in the United States can benefit from holding ADRs rather than ordinary shares in the issuer’s home market, because ADRs trade, clear and settle according to United States market conventions.
ADRs allow U.S. investors to buy non-U.S. securities and hold these in their U.S. brokerage accounts. ADRs also allow access to price and trading information, U.S. dollar dividend payments and corporate action notifications.
IperionX ADRs can be purchased through a typical broker, just as you would to buy other U.S. securities. You cannot buy ADRs directly from IperionX.
The Bank of New York Mellon (BNY Mellon) is the depositary bank and plays a key role in the process of issuance and cancellation of ADRs.
An overview of the IPX ADR program can be found here www.adrbnymellon.com?cusip=44916E100
For more information on BNY Mellon and ADRs, please visit:
Section 5.9 of the ADR Deposit Agreement discloses all applicable fees. A copy can be found by visiting:
There will be an issuance fee of up to US$5.00 per 100 ADRs (or portion thereof) charged by The Bank of New York Mellon for the issuance of the ADRs. The exchange of your dematerialised ordinary shares will need to be managed by your broker as ordinary shares need to be transferred electronically to The Bank of New York Mellon prior to the issuance of ADRs.
Converting ASX-listed ordinary shares into ADRs can be completed through your broker.
To convert your ordinary shares into ADRs:
- You need to transfer your ordinary IPX shares to BNY Mellon’s local custodian, HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED (SWIFT BIC: HKBAAU2SSYD, CHESS PID: 20057, Safekeeping Account: 011-552130-068). This process is usually completed by your broker via an electronic CHESS transfer, or broker transfer form. Your broker should be able to assist with this.
- HSBC also require the U.S. ADR delivery instructions to accompany any deposit of ordinary shares. This information should be sent via email to firstname.lastname@example.org and should include details of the institution where the ADRs will be delivered to in the U.S. market (i.e., institution / broker name & DTC acct. info).
- Once BNY Mellon receives confirmation from HSBC that your underlying ordinary shares have been deposited, new ADRs are issued and delivered to your nominated U.S. broker, in accordance with the ADR programs “Deposit Agreement”.
Your brokers back office will be familiar with the ordinary share to ADR conversion process. Should your broker have a settlement enquiry, they can contact email@example.com.
A registered holder is one whose name appears on the books of the depositary. The registered holder is considered the owner of the record. A beneficial holder is one whose holdings are registered in a name other than his or her own, such as the name of a broker, bank, or nominee.
For registered owners, ownership is registered by the depositary bank and is evidenced by an account statement provided by the depositary.
Registered owners can hold physical ADR certificates. Please contact BNY Mellon for more information.