ADRs FAQs

   

What is an ADR?
What is the difference between an ADR and an ADS?
What are the benefits of holding ADRs?
What are the security details for Nestlé ADRs, and what is the ratio?
What are the main tickers for Nestlé ADRs?
Where are Nestlé ADRs traded?
Why are Nestlé ADRs unlisted?
Who is Nestlé's ADR depositary bank?
How can I hold Nestlé ADRs?
How can I buy and sell Nestlé ADRs?
How can I find the ADR price?
Does holding Nestlé ADRs eliminate exposure to exchange fluctuations between the US dollar and the Swiss Franc?
When is the Nestlé ADR dividend paid?
How do I receive dividends from my ADRs or proceeds from other corporate actions?
Can I reinvest any dividends Nestlé may pay out?
How can I check my shareholdings?
What should I do if I lost my ADR certificate?
Can I vote at the General Meeting?

 

 

What is an ADR?

An American Depositary Receipt, or ADR, is a negotiable US security representing ownership of publicly traded shares in a non-US corporation. ADRs are quoted and traded in US dollars in the US securities market. Also, the dividends, if any, are paid to investors in US dollars. ADRs were specifically designed to facilitate the purchase, holding and sale of non-US securities by US investors.

Return to top

 

What is the difference between an ADR and an ADS?

An ADR is the actual physical certificate whereas an American Depositary Share (ADS) is the actual share. An ADR can represent any number of ADSs. The term "ADR" is often used to mean both the certificates and the securities themselves.

Return to top

 

What are the benefits of holding ADRs?

ADRs allow US investors to diversify their portfolio with foreign securities. In addition, ADRs trade, clear and settle in accordance with US market regulations and permit prompt dividend payments and corporate action notification. If an ADR is exchange-listed, investors also benefit from readily available price and trading information.

Return to top

 

What are the security details for Nestlé ADRs, and what is the ratio?

The relationship between the ADR and the ordinary share is referred to as the ratio. In the case of Nestlé ADRs, 1 Nestlé ADR represents 1 Swiss share. Nestlé ADRs (CUSIP Number 641069406) trade in the US.

Return to top

 

What are the main tickers for Nestlé ADRs?

- Reuters NSRGY.PK
- Bloomberg NSRGY

Return to top

 

Where are Nestlé ADRs traded?

Nestlé ADRs are traded on the US over-the-counter market.

Return to top

 

Why are Nestlé ADRs unlisted?

Nestlé is a company headquartered and incorporated in Switzerland and therefore reports its financial information according to International Accounting Standards as opposed to US GAAP. US GAAP financial reporting is a prerequisite to listing in the United States.

Return to top

 

Who is Nestlé's ADR depositary bank?

Citibank, N.A. ("Citibank") is the depositary bank for Nestlé ADRs. Nestlé ADRs are backed by registered shares held under custody in Switzerland in Citibank's name on behalf of Nestlé ADR holders. Citibank as depositary bank performs the roles of registrar, transfer agent, record keeper and dividend paying agent. Citibank also coordinates the proxy voting process.

Return to top

 

How can I hold Nestlé ADRs?

There are 2 ways to hold ADRs. Either you hold ADRs through your usual bank or broker, in which case you are a "beneficial holder". Alternatively, you can hold your ADRs directly through Citibank as ADR depositary, in which case you are a "registered holder". You are therefore on the company's shareholder register that is maintained by Nestlé's ADR depositary, Citibank. Registered holders of Nestlé ADRs may hold their ADRs either physically in the form of a certificate or in uncertificated, book-entry form, evidenced by an account statement.

Return to top

 

How can I buy and sell Nestlé ADRs?

You can buy and sell Nestlé ADRs through any broker licensed to buy and sell US securities.

If you opt to be a registered holder or enroll in Nestlé’s Dividend Reinvestment Plan you may contact Citibank, Nestlé's ADR depositary bank, at:

Citibank
Shareholder Services
P.O. Box 43077
Providence, Rhode Island 02940-3077
USA

US Toll Free Tel.: 1-877-CITI-ADR (1-877-248-4237)
Overseas Tel: +1-816-843-4281
Fax: +1-201-324-3284

Citibank@shareholders-online.com

Return to top

 

How can I find the ADR price?

To find a recent price quote for Nestlé's ADRs you can go to the appropriate page on Citibank's website https://www.citiadr.idmanagedsolutions.com. Alternatively, financial publications that quote US share prices will display Nestlé's ADR price as well. For the most up-to-date information ask your broker or consult a service that offers quotes.

Return to top

 

Does holding Nestlé ADRs eliminate my exposure to foreign exchange fluctuations between the US dollar and the Swiss Franc?

No, ADR share prices carry foreign currency risk depending on the movement of the US dollar against the Swiss franc. Most of the ADRs trade in line with the underlying security. The spread is in general very small, reflecting the cost of foreign exchange conversion and other execution costs. If the currency of the underlying stock rises against the US dollar, the ADR price is expected to rise (and vice versa).

Return to top

 

When is the Nestlé ADR dividend paid?

The ADR dividend is paid on average one month after the dividend on the ordinary share. Most ADR holders are US residents and are entitled to a favorable withholding tax rate. After the payment of the dividend on the ordinary share, there is an extensive process between Citibank (Nestlé's ADR depositary bank) and the Swiss Tax Authorities that enables these US residents to benefit from a favorable 15% withholding tax rate. This results in the delayed payment of the dividend to ADR holders.

Return to top

 

How do I receive dividends from my ADRs or proceeds from other corporate actions?

You receive dividends in US dollars from ADRs if you are a holder of Nestlé ADRs on the dividend's record date. The same holds true for proceeds that result from a stock split of Nestlé ADRs. Proceeds will be credited to the holder's account on the corporate action's effective date.

Return to top

 

Can I reinvest any dividends Nestlé may pay out?

Beneficial holders need to follow the provisions for dividend reinvestment as established by their broker if applicable. Registered holders may opt to enroll in Nestlé's Dividend Reinvestment Plan.
To do so please contact Citibank, Nestlé's ADR depositary bank, at:

Citibank
Shareholder Services
Nestlé ADS Dividend Reinvestment Plan

P.O. Box 43077
Providence, Rhode Island 02940-3077
USA

US Toll Free Tel.: 1-877-CITI-ADR (1-877-248-4237)
Overseas Tel: +1-816-843-4281
Fax: +1-201-324-3284

Citibank@shareholders-online.com

Return to top

 

How can I check my shareholdings?

Beneficial holders will need to contact their broker. Registered holders may call Nestlé's ADR depositary bank, Citibank, at US Toll Free Tel.: 1-877-CITI-ADR (1-877-248-4237), Overseas Tel.: +1-816-843-4281.

Return to top

 

What should I do if I lost my ADR certificate?

Please contact Citibank immediately to report the loss of your certificate, at US Toll Free Tel.: 1-877-CITI-ADR (1-877-248-4237), Overseas Tel.: +1-816-843-4281. For a duplicate certificate you will need to pay an insurance fee of approximately 3% of the value of your ADR and submit a completed affidavit of loss to Citibank. Citibank will provide the affidavit of loss and calculate the amount of insurance fee required by you.

Return to top

 

Can I vote at the General Meeting?

As an ADR holder on the record date, you will have the sole right to vote the equivalent number of underlying shares as represented by your Nestlé ADR holdings. You will receive your proxy card and other relevant documentation through your usual intermediary.

Return to top