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Since the two securities are linked, the stock prices should always reflect each other´s value. The ADR is simply a certificate representing one Sandvik share held in custody by Deutsche Bank, which is the ADR depositary bank and performs the function of transfer agent and registrar. Sandvik has one share class, which trade on the Stockholm Stock Exchange in Swedish Krona. What is the difference between Sandvik's ordinary shares and ADRs? You can think of the ADR as a foreign stock repacked to work like a US stock so that an investor can track the share price and receive dividends in dollars.
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Speaking to TechCrunch, Robinhood co-founder Vlad Tenev said: “It’s a tough market, but we’re optimistic that we’re providing a lot of value.ADR stands for American Depository Receipt and these securities represent the underlying common shares of foreign companies. Robinhood arrived at that commercial solution to play catch-up with its main business rival, Interactive Brokers – a shares app firm that has already started working in China on an unregulated basis. In a landmark deal, Robinhood agreed a process of integrating its technology with that of the specialist trading app StockMaster, operated by China’s leading search giant Baidu. Indeed, the alert has emerged a little under two months since US zero-fee trading app Robinhood announced it was entering China, with the aim of enabling investors there to trade on the US stock market. The regulator’s tone and message are distinctly at odds with market trends. Also, overseas brokerage companies should get regulator’s approval to run brokerage business inside China.” “According to the Securities Law,” the CSRC alert explained, “without the approval of the securities regulator under the State Council, individual or institution can run brokerage business. “However, it has already aroused the attention of regulators as it may release huge potential demand from Chinese people to invest overseas… it will further weigh on the capital outflow pressure.”Īt present, the affected firms are categorised as technology companies, and as such are not officially permitted to work as financial services providers. Speaking to the South China Morning Post, an anonymous Tiger Securities source said: “The current size of the market is still small, compared to the A-share market, which saw average daily turnover of several hundred billion. In July, the telecom firm’s app generated turnover of $100m – and that was only its first month of operation. Once disputes happen, the interests of investors will lack effective protection.”īrands singled out in the alert included Jimu Stock, Futu Network and Tiger Securities, the latter a wholly owned subsidiary of leading Chinese smartphone manufacturer Xiaomi. “By using the internet platforms to trade the overseas market,” the regulator warned, “investors will have their accounts and money offshore. Such platforms, it said, were potentially dangerous because they lack the ‘legal protection’ that would typically stem from formal approval – something that the CSRC has so far withheld from apps of this type. In a special alert issued to the investment community, the regulator zeroed in on platforms that “cooperate with overseas brokerage companies, providing channels and services for domestic investors to trade on the overseas equity market”.
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Regulator sounds alarm over lack of ‘legal protection’ in platforms that are working outside China’s Securities LawĪ wave of mobile apps designed to make it easier and more convenient to trade stocks and shares has fallen foul of the China Securities Regulatory Commission (CSRC).