An American share is a share of stock issued by a
company that is based outside the United States, but issued to an American
investor through the auspices of a transfer agent representing that foreign company. This arrangement for
purchasing securities certificates issued by non-US companies must be conducted
in accordance with regulations put in place by the Securities and Exchange
Commission, or SEC. The certificates themselves serve as proof of the
investor’s claim on the foreign equities and make it possible for investors who
are US citizens to enjoy the benefits of owing shares in companies based around the world.
The process of purchasing American share investments
requires working through a transfer agent. The agent will have authority from
the issuer of the stock to sell shares to international investors, with the
provision that the agent comply with any trade regulations that may apply. In
the case of the American share, this means the agent must be aware of and
willing to comply with the current trade regulations put in place by the SEC in
the United States. Compliance with the regulations not only protects the
interests of the investor who is making the purchase but also protects the
transfer agent in the event of a default on the purchase. The protection
afforded to the agent in turn helps to indirectly protect the interests of the
issue of the stocks, ensuring the foreign company does not incur any type of
inconvenience or loss as the result of the domestic investor from following
through on the deal.
For US investors, the American share presents the
opportunity to participate in investments that would be difficult if not
impossible to secure otherwise. With trade laws varying from nation to nation,
the ability to legally make direct deals with issuers may or may not exist.
When this is the case, obtaining securities certificates in this manner makes
it possible to comply with laws in both nations involved while also making sure
that both parties are legally protected in their respective roles as buyer and
seller.
Many investors in the United States utilize this
American share model as a way to include international investments in their
portfolios. Doing so can be a very lucrative arrangement, allowing investors to
acquire interests in companies that in some cases have been in business for
centuries. As with any type of investment activity, there is some degree of
risk with this approach. For this reason, investors should research offers
carefully before beginning to work with a transfer agent to acquire the desired
securities.