FSC Chief Says Solidigm’s U.S. IPO Would Fall Under Dual-Listing Rules, Parent Shareholders Must Be Protected

Financial Services Commission Chairman Kim Byoung-hwan said Solidigm’s potential U.S. listing would also be subject to South Korea’s dual-listing guidelines. That means both parent companies, SK hynix and SK Square, would need to complete shareholder-protection procedures.

Kim made the remarks on Oct. 22 during a comprehensive audit of the National Assembly’s Political Affairs Committee, after People Power Party lawmaker Park Sung-hoon asked whether the rules would apply to a U.S. listing by Solidigm. The case falls under the dual-listing guidelines, Kim testified, adding that SK Square and SK hynix, as parent companies, must fulfill five obligations based on their fiduciary duty to shareholders.

The five obligations are assessing the impact on shareholders, preparing shareholder-protection measures, communicating with shareholders, holding a board vote for or against the plan, and disclosing related details. The process is designed to review how a subsidiary listing would affect existing shareholders of the parent company and to put protections in place. Guidelines prepared by the Financial Services Commission and the Korea Exchange in principle prohibit dual listings, but allow them on an exceptional basis if shareholder-protection procedures are completed.

Kim also reaffirmed that the same standard applies to overseas listings. In response to a question from Democratic Party lawmaker Lee Kang-il, he said the rules apply regardless of whether the listing is overseas or domestic. Earlier, Financial Supervisory Service Governor Lee Bok-hyun said at a parliamentary audit on Oct. 19 that the Financial Services Commission and the Financial Supervisory Service shared the view that Solidigm falls under the regulations.

Solidigm is the U.S. subsidiary established after SK hynix acquired Intel’s NAND flash and solid-state drive, or SSD, business in 2021. As the possibility of a U.S. listing has drawn attention, the protection of parent-company shareholders’ interests has emerged as a key issue.

Kim did not reach a conclusion on whether a Korean securities registration statement would be required. He said there had been no official announcement of a listing or any concrete details, indicating the plan has yet to be formalized.