[2026 National Assembly Audit] Following Lee Chan-jin, Lee Eok-won Also Says "Solidigm's U.S. Listing Falls Under Duplicate-Listing Rules" (Roundup)

National Assembly Political Affairs Committee's Comprehensive Audit of the FSC and FSS

Apologizes over single-stock leveraged product debacle, saying, "I feel a heavy heart"

Lee Chan-jin denies review was rushed

Rules out discontinuing single-stock leveraged products

Following Financial Supervisory Service Governor Lee Chan-jin, Financial Services Commission Chairman Lee Eok-won also said that Solidigm, a sub-subsidiary of SK hynix, would be subject to regulations on duplicate listings if it pursues a U.S. listing. He explained that SK hynix and SK Square would incur obligations as parent companies under the ownership structure. He also apologized again, as a head of a financial authority, for the single-stock leveraged exchange-traded fund (ETF) incident, in which losses to individual investors alone were estimated at more than KRW 6 trillion.

At a comprehensive audit by the National Assembly’s Political Affairs Committee on Oct. 22, Chairman Lee was asked by Park Seong-hoon of the People Power Party whether he agreed with the FSS governor’s statement that Solidigm’s U.S. listing would constitute a duplicate listing. He replied, "Yes. It is subject to the guidelines on duplicate listings." Governor Lee Chan-jin also said at an audit on Oct. 19 that both the FSC and the FSS considered the case subject to regulations on duplicate listings.

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Solidigm was established after SK hynix acquired Intel’s NAND flash and solid-state drive (SSD) business in 2021. It has a complex ownership structure running from SK Inc., in which SK Group Chairman Choi Tae-won holds a stake, through SK Square, SK hynix and AI Company to Solidigm. SK hynix shareholders are now strongly protesting that if Solidigm’s core business is recognized as the value of a separate entity through a Nasdaq listing, the value of existing shareholders’ holdings will be eroded, as happened with the duplicate listings of LG Energy Solution and Kakao affiliates.

Asked that day whether the regulations on duplicate listings would apply, Chairman Lee said, "SK Square and SK hynix, as parent companies, must fulfill five obligations based on their duty of loyalty to shareholders." He added, "In August, we established guidelines that prohibit duplicate listings in principle while allowing exceptions, and we are implementing them." To qualify for an exception to the general prohibition on duplicate listings, a parent company must fulfill its duties to shareholders, including conducting an impact assessment on shareholders, preparing shareholder protection measures, communicating with shareholders (or confirming whether they consent), holding a board vote on whether to approve the listing, and making disclosures. 

Responding to criticism that imposing these obligations amounted to a mere "formality," Chairman Lee said, "The five obligations are very substantial." He added, "Ultimately, whether the board fulfilled its duty to shareholders will remain on record, and if shareholders later raise various issues through lawsuits or other means concerning the procedures, process and substance, all of that will serve as evidence."

Asked whether the regulations on duplicate listings would also apply to plans for an overseas listing, he confirmed that "the guidelines on duplicate listings apply to both overseas and domestic listings."

However, when asked about the scope of the regulations on duplicate listings that would apply to Solidigm and whether it would be required to file a securities registration statement in Korea, he avoided giving a direct answer, saying, "There has been no official announcement that it will list, nor are there any specific details yet." He added, "We will be able to assess the situation once various details emerge, including the actual structure and who is involved."

Financial authorities are reportedly also considering measures such as requiring Solidigm to file a securities registration statement in Korea. It is unclear whether a domestic securities registration filing would be required, given that the structure involves a foreign company pursuing a listing overseas. On the matter, Governor Lee Chan-jin previously said, "We are waiting for an authoritative interpretation from the FSC," adding, "This is now something we are preparing to discuss."

Yonhap News

That day, the heads of the financial authorities again bowed their heads in response to calls for an apology over losses suffered by individual investors from single-stock leveraged products. Chairman Lee said, "Despite the policy need and the purpose behind their introduction, I feel a deep sense of responsibility for the various consequences that have resulted." He added, "We will take a more careful and meticulous approach to investor protection and market stability." Governor Lee also said, "I have reflected deeply on the role and responsibility of the financial supervisory authorities. I am sorry." He added, "We will take this as an opportunity to reconsider and deeply reflect on the role and responsibility of the financial supervisory authorities in protecting investors going forward."

According to statistics that the FSS distributed to members of the Political Affairs Committee on Oct. 21, data compiled from 10 comprehensive financial investment business entities—Korea Investment & Securities, Mirae Asset Securities, NH Investment & Securities, Meritz Securities, Samsung Securities, KB Securities, Hana Securities, Kiwoom Securities, Shinhan Securities and Daishin Securities—showed that individual investors’ total losses reached KRW 6.313 trillion from the launch of single-stock leveraged exchange-traded products (ETPs) on May 27 through Aug. 14. 

Governor Lee, however, dismissed allegations that the review of single-stock leveraged products had been "rushed." His remarks came in response to a series of claims that the review was "irregular" and "hasty," after he said at the FSS audit on Oct. 19 that "there were aspects of the review that were expedited to meet the launch schedule."

Governor Lee stressed, "The statutory review period is 15 days. When reviewing securities registration statements, we thoroughly examine each filing over the 15-day period, including the product structure and related risks, and it is true that we accepted the filings once the 15 days had elapsed." He added, "The usual process involves a preliminary listing review followed by a securities registration filing, but I said that in this case, the filing came directly to the FSS, which was one reason the process was faster."

When Park Seong-hoon of the People Power Party asked, "Who specifically requested that the review period be shortened to 29 days?" Governor Lee replied, "I think there has been a misunderstanding. I made that comment while answering a question about a concurrent review in connection with the launch timeline."

He ruled out discussing whether to discontinue the product. FSC Chairman Lee Eok-won said, "Discontinuing the product now would raise property rights issues." He added, "It has been stabilized through various measures, but we will continue to consider the matter."

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