Brazilian oil giant Petrobras reports that Bank of New York Mellon was chosen to represent the company’s American Depositary Receipt (ADR) program after bidding. ADRs are negotiable securities in the US that represent one or more shares of a foreign company.

The program will be officially transferred to Bank of New York Mellon on Jan. 3, 2012 and the contract will last five years.

BNY Mellon says it has seen a six-fold increase in the number of unsponsored DR programs, following an SEC rule change in October 2008. The rule revision, simplifying the formation and trading of over-the-counter DRs of non-US publicly-traded companies, has resulted in more than 1,000 new unsponsored DRs from 35 countries coming to market. These DRs have a combined market capital estimated at $12 billion. 

BNY Mellon has set up programs for 92% of the unsponsored DRs created since late 2008, including more than 400 where it is the only depositary on record. The new DRs are in response to investor demand for access to companies in key sectors and countries, such as mining operations in China, manufacturers in Japan, and forestry firms in Finland. Rising interest in non-US equities has driven up the number of all DR programs, sponsored and unsponsored, to more than 3,400 – a 6.2% jump over the past year.

“With investors seeking greater diversification, we're not surprised by the growth in interest and creation of unsponsored DRs that have helped global companies raise visibility in the US marketplace,” said Michael Cole-Fontayn, CEO of BNY Mellon’s depositary receipts business.  “Also, more than 240 unsponsored DRs are now being used in the BNY Mellon family of DR indices.”

Cole-Fontayn added, “Investment firms are launching a range of new ETFs tied to these indices to address the surging demand for lower cost, more transparent investment vehicles.”

BNY Mellon acts as depositary for more than 2,500 American and global depositary receipt programs, acting in partnership with leading companies from 67 countries.