Agency broker and trading technology firm ConvergEx has been granted a patent by the United States Patent and Trademark Office that covers the technology used to develop its new suite of American depository receipt trading (ADR) tools.
Specifically, the patent covers ConvergEx's proprietary electronic ADR conversion system. The firm's new ADR trading tools are ADR Direct, ADR Plus and Reverse ADR.
ADR Direct allows US clients to trade ordinary shares overseas, convert the shares to ADRs in US dollars and instantly receive a net ADR price. Using this strategy, clients settle part of the ADR trade using the US settlement cycle.
ADR Plus is an algorithmic strategy that allows clients to source liquidity for ADR trades in both US and overseas markets. ADR Plus automatically converts trades to and from ADRs on behalf of clients. Where US-listed ADR trading hours overlap in Europe and Latin America for example, the algo dynamically monitors liquidity across multiple markets and enables clients to send US symbols from their OMS or EMS in the same way they would for a locally-traded order.
With Reverse ADR, clients can trade ADRs in the US, obtain a local currency conversion price and settle the trade in ordinary shares in the local currency and using the local settlement cycle. This allows investors to extend US trading hours for these stocks, which ConvergEx claims allows continued trading activity when there is news during the Europe/US overlap.
“Our ADR product suite offers clients a unique solution to easily and automatically convert ordinary shares to ADRs and ADRs to ordinary shares in real”time. They extend trading hours, minimise market impact, reduce trading costs and offer transparency,” said Andrew Levine, managing director and head of ConvergEx’s ADR business. “These products are available to all clients who can choose to access the tools directly on their desktops or through ConvergEx’s ADR Desk.”