Cross-Border Listings: ADRs, GDRs, and Dual Listings

Introduction

Cross-border listings let issuers access capital pools beyond their home market through structured securities (ADRs, GDRs, dual listings) that bridge regulatory regimes. American Depositary Receipts (ADRs) are the dominant mechanism for non-US issuers to access US investors, structured as US-dollar-denominated receipts representing foreign-company shares held by a depositary bank. ADRs come in three principal levels: Level I (OTC, no US exchange listing), Level II (US exchange listing without capital raise), and Level III (US exchange listing with capital raise via Form F-1). Global Depositary Receipts (GDRs) serve a parallel function for international capital pools, typically listed in London or Luxembourg with Reg S tranches placed outside the US plus 144A tranches sold to QIBs in the US. Programs can be sponsored (issuer-participating) or unsponsored (set up by depositary banks). Dual listings represent a different structure where the issuer maintains primary listings on multiple major exchanges (e.g., HKEX plus NYSE), capturing the combined capital pool through full direct listings rather than depositary-receipt structures. Understanding the cross-border listing toolkit is essential for ECM bankers covering non-US issuers seeking US capital and for US issuers seeking international capital pools.

American Depositary Receipt (ADR)

A US-dollar-denominated negotiable security issued by a US depositary bank representing shares in a non-US company. ADRs come in three principal levels: Level I (OTC US trading without exchange listing), Level II (US exchange listing without capital raise), and Level III (US exchange listing with capital raise through Form F-1). ADRs let non-US companies access US investor capital while letting US investors gain foreign-equity exposure without cross-border or cross-currency complications.

ADRs are the principal mechanism for non-US issuers to access US investors.

How ADRs Work

ADRs are US-dollar-denominated negotiable securities issued by a US depositary bank that represent a specified number of shares (or fraction of a share) in a non-US company. The depositary bank holds the underlying foreign shares and issues ADRs against them, with the ADR-to-share ratio set at issuance to produce a convenient US-dollar trading price. ADRs trade in US markets (OTC or on US exchanges depending on level), settle through US clearing systems, and pay dividends in US dollars.

Level I ADRs

Level I ADRs trade over-the-counter through OTC markets without US exchange listing. The structure has the lightest regulatory burden (no SEC registration required, only Rule 12g3-2(b) exemption), making it attractive for foreign issuers seeking modest US investor exposure without committing to full US public-company status. Level I ADRs are typically established by depositary banks (Citi, BNY Mellon, JPMorgan, Deutsche Bank) and do not raise new capital.

Level II ADRs

Level II ADRs are listed on a US exchange (NYSE or Nasdaq) but do not raise new capital. The structure requires SEC registration through Form F-6 plus the foreign issuer becoming an SEC reporting company through Form 20-F annual reports and Form 6-K interim reports. Level II provides US exchange-listed visibility and broader institutional access without the full capital-raise commitment.

Level III ADRs

Level III ADRs are issued as a public offering of securities on a US exchange, requiring the foreign company to file Form F-1 with the SEC and follow US capital-raising rules similar to those of US issuers. Level III is the highest-level ADR program, providing the foreign issuer with both US-listed status and the ability to raise capital through US institutional and retail investors. Notable Level III ADR issuers include major Asian and European companies that have chosen US public-market access for capital scale.

Sponsored vs Unsponsored

Sponsored ADRs involve the issuer entering a contractual deposit agreement with the depositary bank, participating in program design and disclosure. Unsponsored ADRs are set up by depositary banks without issuer participation, typically when the depositary identifies investor interest. Most major programs are sponsored; unsponsored programs typically remain at Level I.

Global Depositary Receipt (GDR)

A negotiable instrument issued by depositary banks representing shares of a foreign company, typically listed in London or Luxembourg and traded internationally outside the US. GDRs are commonly issued with both a Regulation S international tranche (placed outside the US) and a Rule 144A US tranche (sold to QIBs in the US), letting issuers access both international institutional capital and US QIB capital through a single offering. GDRs are most common among emerging-markets issuers seeking broader international investor bases beyond their home markets.

GDRs are the international parallel to ADRs, providing non-US capital pool access for issuers seeking diversified international investor bases.

How GDRs Work

GDRs are negotiable instruments issued by depositary banks (typically the same set: Citi, BNY Mellon, JPMorgan, Deutsche Bank) representing shares of a foreign company. GDRs are typically listed on the London Stock Exchange or the Luxembourg Stock Exchange, traded internationally outside the US.

Reg S / 144A Structure

Most GDRs include both an international tranche placed under Regulation S (outside the US) and a US tranche placed to QIBs under Rule 144A. The dual-tranche structure lets the issuer access both international institutional capital and US QIB capital through a single offering. Reg S prohibits any directed selling efforts in the US, while 144A specifically permits resales to qualified institutional buyers, making the two regulatory regimes complementary for international placements.

When Issuers Use GDRs

GDRs remain common for emerging-markets issuers (Indian companies under SEBI's 2019 DR framework, historically Russian, Latin American, Middle Eastern) seeking broader international capital pools beyond their home market. The London or Luxembourg listing provides European-time-zone trading plus 144A US QIB participation. The structure is less common for major Asian issuers, who prefer direct HKEX listings or US ADR Level III programs.

Post-2024 Chinese ADR Risk Update

The PCAOB-China inspection agreement remains effective, with Chinese companies not currently subject to delisting under the Holding Foreign Companies Accountable Act (HFCAA). The PCAOB has continued to bring individual enforcement actions against China- and Hong Kong-based audit firms (for example, JTC Fair Song in late 2024 and Centurion ZD in mid-2025) for rule violations and failures to cooperate, but no issuers are currently flagged as at-risk under the SEC's HFCAA tracker. Chinese companies have resumed selective US listings (Chagee, the milk-tea operator, completed a 2025 Nasdaq IPO), though most Mainland China issuers prefer the A+H structure to avoid US delisting tail risk while still accessing international capital.

Dual listings represent a different cross-border structure where the issuer maintains primary listings on multiple major exchanges through full direct listings rather than depositary receipts.

How Dual Listings Differ

Unlike depositary receipts (which represent the underlying foreign shares through a US-traded receipt), dual listings involve the issuer's actual shares trading on multiple exchanges. Each listing represents the same underlying equity ownership, with cross-border investors able to trade in either venue. Dual listings require the issuer to comply with both jurisdictions' listing requirements and ongoing disclosure obligations.

Common Dual-Listing Patterns

The A+H structure is the most prominent current pattern, with 90 A-share companies in the HKEX pipeline as of late 2025. UK-US dual listings have historically served larger UK issuers seeking US capital, though post-Brexit regulatory divergence has reduced new dual-listing activity. Australian-Canadian and other regional pairings exist for specific issuer profiles.

When Dual Listings Win Over ADRs

Dual listings provide deeper capital-pool access than ADRs because they involve actual equity trading rather than depositary-receipt trading. The structure works best for larger issuers with sufficient scale to support liquid trading in both venues. Smaller issuers default to ADR structures because the regulatory burden is more manageable.

Issuers selecting between cross-border listing structures evaluate multiple factors.

Capital Pool Access

The principal factor is which capital pool the issuer wants. ADR Level III provides the deepest US institutional and retail access. GDRs provide European institutional access plus 144A US QIBs. A+H provides Mainland-Hong Kong cross-flow plus international access via Hong Kong. The choice depends on which investor base aligns with the issuer's strategic objectives.

Regulatory Burden

ADR Level III and dual listings impose the heaviest ongoing regulatory burden (full SEC reporting plus home-market reporting). ADR Level I and GDRs impose materially lighter burdens.

Strategic Positioning

Some issuers choose cross-border listings primarily for positioning. A US listing signals "global company" status; a Hong Kong listing signals Asia-Pacific market presence. Strategic positioning sometimes dominates pure capital-access calculations.

The cross-border listings framework above provides the toolkit for international ECM activity. The next article walks through the listing-venue choice between NYSE, Nasdaq, HKEX, and LSE, where the specific selection criteria help issuers and ECM bankers align their venue choice with the issuer's strategic objectives.