[2026 Parliamentary Audit] Lee Chanjin: "SK hynix's Solidigm Listing Falls Under Dual-Listing Rules" (Comprehensive)

Controversy Over Hasty Review of Single-Stock Leveraged Products: "We Were Trying to Meet the Schedule"

Financial Supervisory Service Governor Lee Chanjin said on Oct. 19 that SK hynix's U.S. subsidiary Solidigm would be subject to regulations on dual listings if it pursued a listing. Regarding controversy over the FSS's "irregular" and "hasty" review process for the launch of single-stock leveraged exchange-traded funds (ETFs), he acknowledged that the review had been expedited in part to meet the listing schedule. He also assessed that single-stock leveraged ETFs and other factors had "contributed to some extent" to recent volatility in the domestic stock market.

Financial Supervisory Service Governor Lee Chan-jin answers lawmakers' questions during a parliamentary audit of the Financial Supervisory Service and other agencies at the National Assembly on Oct. 19, 2026. Photo by Yoon Dong-ju

Concerns Raised at Parliamentary Audit That Solidigm's U.S. Listing Would Dilute Shareholder Interests

At a parliamentary audit by the National Assembly's Political Affairs Committee that day, Lee responded to a question from Democratic Party of Korea lawmaker Park Sanghyeok asking whether Solidigm's case constituted a dual listing, saying, "I understand that the Financial Services Commission and the FSS share that view."

When People Power Party lawmaker Park Sunghoon pointed out that "SK hynix explained to the U.S. Securities and Exchange Commission (SEC) the negative impact of a subsidiary listing on its parent company's share price, but has provided no such explanation to domestic shareholders," Lee said, "We are continuing to monitor the Solidigm issue," adding, "Both the Financial Services Commission and the FSS have concluded that it falls under the dual-listing rules."

Solidigm was established after SK hynix acquired Intel's NAND flash memory and solid-state drive (SSD) businesses in 2021. While SK hynix has repeatedly dismissed reports of a Solidigm initial public offering (IPO), saying that nothing has been decided, the market sees a Nasdaq listing next year as likely. Solidigm is reportedly in the process of selecting Goldman Sachs and Morgan Stanley as lead underwriters for its IPO. Major foreign media outlets estimate Solidigm's corporate value at up to $150 billion (approximately 200 trillion won). 

Lee's remarks that day were interpreted to mean that Solidigm would be subject to dual-listing regulations if it pursued a listing. Under the rules, SK hynix's board, as the parent company's board, would be subject to five shareholder-duty-based obligations: assessing the impact on shareholders, establishing shareholder-protection measures, communicating with shareholders, holding a board vote for or against the listing, and making disclosures. Lee said, "If we can convey our concerns to SK hynix in an appropriate way, we will do so."

Financial authorities are also considering measures such as requiring Solidigm to file a securities registration statement in South Korea. Since the structure involves an overseas entity pursuing a listing abroad, it is unclear whether it would be subject to domestic securities registration requirements. On this matter, Lee said, "We are waiting for an authoritative interpretation from the Financial Services Commission," adding, "We are about to begin discussions."

SK hynix shareholders are strongly opposed to a Solidigm listing, concerned that if the value of its core NAND flash memory and solid-state drive (SSD) businesses is recognized as the value of a separate entity, so-called "double counting" (a discount to the share price resulting from the double counting of corporate value) would be inevitable. Precedents of holding-company discounts, which have commonly been observed, are also fueling shareholder concerns. There are also growing calls to address the multilayered ownership structure of "SK → SK Square → SK hynix → AI Company → Solidigm."

Lee Chanjin, governor of the Financial Supervisory Service, returns to his seat after taking the witness oath and handing his statement to Yoo Dongsu, chairman of the National Assembly's Political Affairs Committee, during a parliamentary audit of the Financial Supervisory Service and other agencies at the National Assembly on Oct. 19, 2026. Photo by Yoon Dongju

Criticism of "Irregular, Hasty" Leveraged ETF Review... Lee: "We Were Trying to Meet the Schedule"

As at the earlier parliamentary audit of the Financial Services Commission, criticism of leveraged ETFs also poured in at the audit that day. Lee, who is regarded as one of President Lee Jae-myung's closest associates, also faced a concentrated attack from opposition lawmakers, particularly after causing a stir with his remark that the listing of leveraged ETFs "should have been stopped, even if I had to lie down in front of it."

People Power Party lawmaker Park Daechul pointed out that while it takes an average of 62 days to list a regular ETF and 43 days for a major index ETF, the listing process for single-stock leveraged products was completed in just 29 days. He also noted that the Financial Services Commission had announced the listing date before asset managers applied for listings, and criticized the process as "irregular and hasty."

Asked about the matter, Lee replied, "Around mid-April, the Financial Services Commission announced the listing schedule for single-stock leveraged ETFs as a policy decision," adding, "In part, we expedited the review to meet that schedule." 

The listing review process also appears to have differed from the usual procedure. Park asked, "The listing review usually has two stages. The Korea Exchange conducts a preliminary review, followed by an FSS review. Is this the first time the FSS has conducted its review before the preliminary review was completed?" The FSS had seen materials on the preliminary review results while the Korea Exchange's preliminary review was still underway. Lee replied, "I checked, and I understand there were no particular problems."

Criticism was also raised that the FSS had identified the risks of the product in an internal report but had not intervened. People Power Party lawmaker Choi Eunsuk presented an FSS report that pointed out structural flaws in single-stock leveraged ETFs and warned against introducing them in South Korea without careful consideration, then asked Lee whether he had read it. Lee replied, "I had not seen it." The FSS, however, explained that "the Korea Exchange's preliminary listing review for a fund is not a mandatory prerequisite for the FSS to begin reviewing its registration statement."

Choi also noted that Hwang Seono, an FSS deputy governor, had attended a meeting in January this year chaired by Kim Yongbeom, then the policy chief at the presidential office. Choi said, "The conclusion of the meeting was to push ahead with the launch of single-stock leveraged products. Did you voice opposition at the time?" Hwang avoided a direct answer, saying, "I don't remember clearly."

Single-stock leveraged ETFs, commonly known as "Samsung Electronics-SK hynix leveraged ETFs," were launched on May 27. At the time, some opposition figures and others repeatedly alleged that the products had been rushed to market in an attempt to boost the stock market just one week before the June 3 local elections.

Lee also faced heavy criticism over his remark at a regular press briefing in June that he "should have stopped" the launch of single-stock leveraged products, "even if [he] had to lie down in front of it." When Social Democratic Party lawmaker Han Changmin said that instead of making such a remark, the FSS should have used its supervisory system to rein in the process in advance, Lee replied, "I will work to ensure that the FSS's position is upheld in the field of supervisory enforcement so that a similar situation does not recur."

In response to People Power Party lawmaker Kim Jaeseop's question about why he had not "lain down," Lee said, "The policy had already been announced and finalized," suggesting that it would have been difficult to stop in practice. Lee explained, "(I made that remark) to sound the alarm for investors, because significant losses to investors were expected." Asked by People Power Party lawmaker Song Eonseok, "Who did you think you should lie down in front of?" Lee replied, "I meant that the launch should have been stopped before the securities registration statement was accepted," but did not answer who he was referring to. 

Asked whether he thought the launch of single-stock leveraged ETFs had contributed to the recent extreme stock market volatility, Lee said, "I think it was a contributing factor to some extent," adding, "Basically, the severe volatility in the underlying shares of Samsung Electronics and SK hynix (had an impact)." He also said he was "deeply concerned" about the recent sharp market decline.

Lee Chanjin, Governor of the Financial Supervisory Service, delivers opening remarks during a parliamentary audit of the Financial Supervisory Service and other agencies at the National Assembly on the 19th. 2026.10.19 Photo by Yoon Dongju

Asked whether the National Pension Service's decision to defer rebalancing had been appropriate, Lee said, "It would not be appropriate for me to comment as the head of an institution." Lee previously served as a member of the National Pension Fund Management Committee. Responding to concerns about a potential conflict of interest involving his son, who works at Mirae Asset Global Investments, he said, "Under the enforcement rules, I am neither a person with a private interest nor connected to the relevant duties in any way," adding, "I recused myself to avoid any misunderstanding, as there could be many issues related to sanctions."

Asked whether he planned to resign to take responsibility for the single-stock leveraged ETF controversy, Lee said, "I don't think it would be appropriate to comment on that now," adding, "That is for the person with the authority to make personnel decisions to decide."

This content was produced with the assistance of AI translation services.