American depository receipts are denominated in U.S. dollars and trade in the United States. The underlying security on which the ADR is based is the American depository share, which trades in the firm’s home market.
There are 4 kinds of ADRs which we summarise in this table. Level 1 ADRs trade in the over-the-counter market and are not listed on any exchange. Level 2 and Level 3 ADRs are both listed securities that trade in the US markets. The main difference between the two is that level 3 ADRs can raise capital in the US market through public offerings.
The Rule 144A securities extend to private equity and does not require SEC registration. Foreign firms are allowed to raise capital by privately placing these depository receipts with qualified institutional investors.
Many years ago, I was exactly where you are today—a CFA Level I candidate juggling a demanding full-time career with the daunting CFA curriculum. Coming from a Computer Engineering background, finance was entirely new territory for me. And yes, it was tough!
I struggled with dense textbooks, late-night cramming, and the frustration of concepts that seemed impossible after a long workday. But after passing Level I (barely), I realized something had to change.
Studying Smarter, Not Harder
Using the Pareto Principle (80/20 rule), I distilled the vast CFA syllabus into essential, easy-to-understand nuggets. I leaned into visual summaries and bite-sized learning sessions that worked around my busy schedule. This smarter approach helped me clear Levels II and III on my first attempts with significantly less stress.
Why PrepNuggets?
I founded PrepNuggets to share the streamlined strategies and innovative learning methods that transformed my CFA journey. Our mission is simple: leverage technology to make CFA prep more effective, accessible, and enjoyable.
Join the PrepNuggets community today—sign up for your free account, and let our thoughtfully crafted materials propel you toward CFA success without unnecessary overwhelm.
Here’s to your CFA journey!
Keith Tan, CFA
Founder & Chief Instructor, PrepNuggets
About the Author
PrepNuggets
Keith is the founder and chief instructor of PrepNuggets. He has a wide range of interests in all things related to tech, from web development to e-learning, gadgets to apps. Keith loves exploring different cultures and the untouched gems around the world. He currently lives in Singapore but frequently travels to share his knowledge and expertise with others.
