Why have I been charged an ADR fee?

American Depository Receipts (ADR) represent indirect ownership of shares of a foreign country that isn’t directly traded on U.S Exchanges.

There is a fee charged when you use ADR. However, this is not a fee imposed by Totality. It is standard practice for US depositary receipts to charge an annual administration fee per depository receipt, depending on the issuing depositary bank. The intention of the fee is to cover costs for banks that take on operational processes such as inventorying, registering, etc. on behalf of the ADR.

Typically, the fee is deducted when dividend payments are made. In case the depositary receipt does not pay a dividend or did not include the custodial fee in their dividend events, the fee will be administered through fee-only events. 

The dividend fee is stipulated in the Deposit Agreement between the depositary bank and the company based on industry standards. The Deposit Agreement is filed with the SEC and is readily accessible to the public. 

The fee per depositary receipt is not dependent on the total amount of dividend being paid but the amount of Stocks held.

How is it calculated?

Calculation Formula:

Number of shares * rate applied by custody

Calculation Example:

If you hold 1000 shares and the rate applied by custody is 0.02 then the charges would be 20 USD. 

NOTE: The ADR fee will be applied on a yearly basis. 

*Depository can also charge the above fee as per their requirements. 

Totality will look to pass on these fees once the fee structure is applied.

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