Korea's FSS chief says Solidigm's US listing conflicts with duplicate-listing rules
In short
Financial Supervisory Service Governor Lee Chan-jin told a National Assembly audit on 19 October that the Financial Services Commission and his agency both judge the planned US listing of SK Hynix's Solidigm to conflict with duplicate-listing rules. He said the FSC is waiting for an official interpretation on whether Solidigm is subject to domestic securities registration, and that he would pass concerns on to SK Hynix.
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Lee Chan-jin (이찬진), governor of the Financial Supervisory Service (FSS), said on 19 October that he judges the planned Nasdaq listing of Solidigm, a US unit of SK Hynix, to conflict with duplicate-listing rules. He spoke at the Political Affairs Committee's audit of the FSS at the National Assembly in Seoul. Asked by People's Power Party lawmaker Park Sung-hoon (박성훈), he said the FSS is continuing to monitor the Solidigm issue and that the judgment that it conflicts with duplicate listing is being made by both the Financial Services Commission (FSC) and the FSS. [ 3 , 6 , 8 , 9 , 11 ]
Park said SK Hynix explained in detail to the US Securities and Exchange Commission the negative effects of a subsidiary listing on the parent's share price, but gave domestic shareholders no such explanation. He called the case a typical example of Korea's chronic duplicate-listing problem extending overseas and said existing shareholders' economic interests are diluted. Seoul Economic Daily reported that SK Hynix itself stated in a June SEC filing that a subsidiary listing could hurt its share price. The committee chair, Yoo Dong-soo, asked that any material on consultations between the FSS and SK Hynix, or reports received, be submitted to the Assembly. [ 3 , 4 , 9 ]
Lee said the FSC is waiting for an official interpretation on whether Solidigm is subject to a domestic securities registration statement. He said he would take whatever appropriate measures are possible, and would pass concerns to SK Hynix if that can be done in an appropriate way. Yonhap, Korea Economic Daily and Kukmin Ilbo described his remarks as meaning the listing falls under duplicate listing, which is prohibited in principle, while a Chosun Ilbo headline and Kukmin Ilbo's text said it may do so. [ 6 , 7 , 8 , 9 , 13 ]
Solidigm was launched when SK Hynix acquired Intel's NAND flash and SSD business in 2021. Several outlets said the authorities have drawn up rules under a stance of banning duplicate listing in principle and allowing exceptions. They also said overseas subsidiaries are not subject to Korea Exchange duplicate-listing review, so the authorities appear to be examining whether Solidigm is covered. Seoul Economic Daily said it is unclear whether the rules apply to overseas listings, and Newsis said such doubts had been raised, while Kyunghyang Shinmun said the FSC had announced they apply to overseas listings too. [ 6 , 8 , 9 , 11 , 13 , 14 , 15 ]
Hankook Ilbo reported that Democratic Party lawmakers Park Sang-hyuk and Lee Kang-il called at the audit for tighter rules, with Lee Kang-il saying there is an institutional gap. Hankook Ilbo also said Solidigm made up about 9% of SK Hynix's first-half revenue and that SK Hynix shares fell more than 10% in a day after the listing reports first appeared. Newsis, citing foreign media, said Goldman Sachs and Morgan Stanley were chosen as lead underwriters, with a Nasdaq listing sought as early as next year. [ 10 , 11 ]
Why it matters
Several outlets note that overseas listings are not reviewed by the Korea Exchange, so it is unclear whether the new domestic duplicate-listing rules reach Solidigm. Lawmakers at the audit called for closing what they described as an institutional gap.
Key facts
- Lee Chan-jin, governor of the Financial Supervisory Service, spoke at the Political Affairs Committee's audit of the agency at the National Assembly on 19 October. [ 6 , 8 , 11 ]
- Asked about Solidigm, Lee said, in the words reported, that the judgment that it conflicts with duplicate-listing rules is being made by both the Financial Services Commission and the FSS. [ 6 , 8 , 9 , 11 , 14 ]
- Lee said the FSC is waiting for an official interpretation on whether Solidigm is subject to domestic securities registration, and that he would take whatever appropriate measures are possible. [ 6 , 9 , 11 , 15 ]
- Lee said he would convey concerns to SK Hynix if that can be done in an appropriate way. [ 6 , 9 , 15 ]
- People's Power Party lawmaker Park Sung-hoon said SK Hynix explained the negative effects of a subsidiary listing to the US SEC but not to domestic shareholders. [ 3 , 6 , 9 ]
- Solidigm was launched when SK Hynix acquired Intel's NAND flash and SSD business in 2021. [ 6 , 8 , 9 , 11 ]
Confirmed by several sources
- Lee Chan-jin said the FSC and the FSS both judge Solidigm's planned US listing to conflict with duplicate-listing rules. [ 6 , 8 , 9 , 10 , 11 , 13 , 15 ]
- Lee said the FSC is waiting for an official interpretation on whether Solidigm is subject to domestic securities registration. [ 6 , 8 , 9 , 10 , 11 , 15 ]
- Lee said he would take appropriate measures where possible and would convey concerns to SK Hynix if that can be done in an appropriate way. [ 6 , 9 , 11 , 15 ]
- Park Sung-hoon said SK Hynix explained the negative effects of the subsidiary listing to the SEC but not to domestic shareholders. [ 6 , 9 , 13 , 15 ]
Still unclear
- Whether the domestic duplicate-listing rules apply to a listing on a foreign exchange. Seoul Economic Daily says application is unclear, Newsis and Hankook Ilbo report doubts or an institutional gap, while Kyunghyang Shinmun says the FSC announced the rules apply to overseas listings too.
- Whether Lee's remarks amount to a firm determination. Newsis and Maeil Business headlines say the listing falls under duplicate listing, while a Chosun Ilbo headline and Kukmin Ilbo's text say it may do so, and several outlets describe his remarks as 'to the effect that' it does.
- What measures the authorities will take, and when the FSC will receive the interpretation. Lee said only that appropriate measures would be taken as far as possible; no document gives a date or specifics.
- The timing and size of Solidigm's listing. Newsis, citing foreign media, said Goldman Sachs and Morgan Stanley were chosen as lead underwriters and the listing could come as early as next year, and on 20 October said the market expects an offering of up to $10 billion.
- Solidigm accounted for about 9% of SK Hynix's first-half revenue, and SK Hynix shares fell more than 10% in a day after the listing reports first appeared. Only Hankook Ilbo reports these figures.
What local media are saying
Timeline, local time
- Asia Economy photos show Lee taking the witness oath and giving opening remarks at the National Assembly audit of the FSS. [ 1 , 2 ]
- Chosun Ilbo reports that Lee said Solidigm's listing has elements of duplicate listing and that he will pass concerns to SK Hynix. [ 3 ]
- Yonhap reports Lee's remarks that the FSC and FSS both judge the listing to conflict with duplicate-listing rules. [ 6 ]
- Yonhap publishes an updated report saying the FSC and FSS share the same view. [ 16 ]
- On 20 October, Newsis reports the controversy over duplicate listing spreading after the audit. [ 23 ]