ADRs are U.S. securities that represent foreign shares of a foreign company and require an equivalent number of foreign shares to be held in a custodian bank. The practice of "pre-publication" allows the issuance of ADRs without deposit of foreign shares, provided that the brokers who receive them have an agreement with a deposit bank and that the broker or his client owns the number of foreign shares corresponding to the number of shares that the ADRs represent. "The SEC`s actions regarding pre-published ADRs have revealed industry-wide abuses," said Stephanie Avakian, CO-head of the SEC. "Mistakes on every institutional link in the chain of these transactions, from the deposit bank to the broker dealer, the markets for these ADRs are ripe for potential abuses at the expense of REL holders." - "ADRs in addition to prior ADRs" - "ADRs. , the SEC found in its report that Cantor Fitzgerald had not implemented and implemented effective strategies and procedures to properly verify whether its partners were operating in securities lending transactions. pre-released ADRs were purchased appropriately. With this latest investigation, the SEC has indicted 13 financial institutions for improper pre-publication practices of AsDr, which have so far included financial statements of more than $427 million. In addition, Cantor Fitzgerald received other declassified ADR service brokers from at least July 2012 to May 2014, but did not take appropriate steps to ensure that they were supported by common shares.

In the present circumstances, BNY Mellon`s custodian receipts division did not act reasonably with respect to the prior ADRs. As a general rule, agreements have been implemented to ensure compliance with standard prior publications, as expressed in the company`s compliance manual, is required. However, what could be considered essentially a red flag indicated that the pre-release brokers were in fact not in compliance with their obligations. For example, some bank staff members were aware that pre-exit brokers were routinely loaned to pre-exit ADRs that they received to counterparties. These brokers took advantage of the transactions by demanding higher rates than they had received from BNY Mellon. These transactions should have indicated that the pre-release brokers were probably not the actual beneficiaries of the actions concerned, as required by the agreements. At least 10 of the 13 financial institutions charged with mishandled advance letters from American Depositary Receipts have halted the activity in recent years amid a long-running investigation by the Securities and Exchange Commission, which has covered much of the industry.