ARM HOLDINGS PLC (ARM) ADS SPON – US0420682058
When looking at ADS’s (or other depository type interests/receipts such as ADR’s), the listing or trading of the actual ADS or ADR is irrelevant. All that matters is the qualifying status of the underlying shares. If the underlying shares are ISA qualifying (because they are listed on a recognised stock exchange or admitted to trading on a recognised stock exchange in the EEA, including the UK), then the ADR (or ADS) automatically qualify (regardless of its listing status).
With American Depository Shares (ADSs), they do represent underlying shares and having checked this with HMRC several years ago, their stance was that they were a type of ‘depository interest’ and to be ISA qualifying, the underlying shares that they represent have to be ISA qualifying in their own right ie. listed on a recognised stock exchange or admitted to trading on a recognised stock exchange in the EEA or UK.
So, in the US, both ADRs and ADSs are a type of depository interest.
We would say the ADSs are not ISA qualifying as there is no evidence that the underlying shares are ISA qualifying.