American Depositary Receipts (ADRs) are a financial instrument that allows foreign companies to list their shares on U.S. stock exchanges. ADRs are issued by U.S. banks, who purchase shares of the foreign company and hold them in custody. Each ADR represents a specific number of the foreign company's shares, which are traded on U.S. stock exchanges.

One key difference between ADRs and ordinary shares traded on U.S. stock exchanges is that ADRs represent ownership of shares in a foreign company. As such, ADR holders are entitled to receive dividends and capital gains in the foreign company's home currency, which can be subject to currency exchange rate fluctuations.

Another difference is that ADRs may be subject to different regulations and reporting requirements than ordinary shares traded on U.S. stock exchanges. This can impact the level of transparency and information available to investors, as well as the level of regulatory oversight.

Despite these differences, ADRs offer U.S. investors a convenient way to gain exposure to foreign markets and diversify their portfolios.

American Depositary Receipts (ADRs) represent shares of foreign companies traded on U.S. exchanges, while ordinary shares are direct ownership stakes in domestic companies. Unlike ordinary shares, ADRs are issued by U.S. depositary banks, which hold the underlying foreign stock and facilitate trading in dollars, avoiding currency conversion. ADRs also simplify compliance with U.S. regulations, though they may have different voting rights or dividend policies than the original shares. Additionally, ADRs come in three levels (I, II, III), each with varying disclosure requirements, whereas ordinary U.S. shares follow standard SEC reporting rules. Investors should note potential tax implications, as ADR dividends may be subject to foreign withholding taxes, unlike dividends from domestic stocks.