Lee Chan-jin (이찬진), head of South Korea's Financial Supervisory Service, said SK hynix's push to list its U.S. subsidiary Solidigm may conflict with rules on duplicate listings.

Lee said at an audit of the National Assembly's Political Affairs Committee on Oct. 19, in response to a question from People Power Party lawmaker Park Sung-hoon, that authorities were continuing to monitor the Solidigm issue. He said both the Financial Services Commission and the Financial Supervisory Service judge that it breaches duplicate listing rules.

Solidigm is a U.S. unit launched after SK hynix acquired Intel's NAND flash and solid-state drive (SSD) business in 2021. As it recently moves forward with preparations for a U.S. stock market listing, concerns have been raised that the value of existing shareholders in parent company SK hynix could be diluted.

Park said SK hynix has explained to the U.S. Securities and Exchange Commission (SEC) the negative impact Solidigm's listing could have on the parent company's share price, while sufficient explanation has not been provided to domestic shareholders.

Financial authorities have already put in place rules based on a stance of "principle ban, exceptions allowed" on duplicate listings. But because subsidiaries seeking listings on overseas markets, such as Solidigm, do not directly undergo listing reviews by domestic exchanges, how far current rules can be applied has emerged as an issue.

Lee said the Financial Services Commission is waiting to obtain an authoritative interpretation on whether Solidigm is subject to domestic securities filing requirements. He said he would do as much as possible on areas where appropriate steps can be taken.

He added that if concerns could be conveyed to SK hynix in an appropriate way, he would proceed.

Depending on the outcome of the authorities' authoritative interpretation, it is expected to become clearer whether domestic shareholder protection rules related to duplicate listings can be applied to listings of overseas subsidiaries.