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This article is from the What Every Investor Should Know.

Foreign Securities

Foreign corporations wishing to sell securities in the United States must register those securities with the SEC. They are generally subject to the same rules and regulations that apply to securities of U.S. companies, although the nature of information which foreign companies make available to investors may be somewhat different. The SEC is working actively to remove regulatory barriers to owning foreign stock, consistent with maintaining investor protection. In addition, U.S. investors who are interested in foreign securities may purchase American Depositary Receipts (ADRs). These are negotiable receipts, registered in the name of a U.S. citizen, which represent a specific number of shares of a foreign corporation.

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