Korea Securities Depository Co-Hosts Seminar with Citibank... "Discuss Support for Voting Rights in Foreign-Currency Securities"

The Korea Securities Depository held a seminar with Citibank on “The Legal Status and Shareholder Rights of Holders of U.S.-Listed Securities.”

From left, Kwon Eui Jin, head of the Global Business Division at the Korea Securities Depository; Kang Hee Sun, head of the Settlement Team 1 at Samsung Securities; attorney Jung Sung Gu of Sejong; Lee Yoon Soo, president of the Korea Securities Depository; David Brown, head of Investor Services for Japan, North Asia and Australia (JANA) at Citibank; Professor Lee Min Kyung of Hanyang University; Professor Lee Jong Hyuk of Seoul National University; and Daniel Lee, senior advisor at Broadridge, pose for a commemorative photo. Photo courtesy of the Korea Securities Depository.

According to the Korea Securities Depository on October 27, some 60 people attended the seminar, including representatives of proxy voting agencies and employees responsible for foreign-currency securities operations at 11 securities firms. In the first session, researchers from Seoul National University’s Industry-Academic Cooperation Foundation presented the key findings of their study, “Legal Status and Exercise of Rights by Holders of U.S.-Listed Securities.” Professor Jeong Sunseop of Seoul National University introduced the background and main points of the study, while Professor Lee Jonghyeok of Seoul National University explained the legal framework governing domestic investors’ holdings of U.S.-listed stocks and the exercise of voting rights.

Professor Lee Minkyeong of Hanyang University analyzed, from a comparative legal perspective, the procedures for domestic investors to exercise voting rights in U.S. stocks and for foreign investors to exercise voting rights in domestic listed stocks. Attorney Jeong Seonggu of Shin & Kim LLC provided an overview of the legal significance of domestic investors exercising shareholder rights through foreign custodian institutions and proposed three measures to improve the Korea Securities Depository’s support for the exercise of shareholder rights.

In the second session, securities firms, the Korea Securities Depository, Broadridge and legal experts discussed ways to improve the support system for voting rights and related legal issues. The head of Samsung Securities’ foreign-currency securities settlement team outlined the current state of voting-rights services for foreign-currency securities and the need for improvement from a practical perspective. The Korea Securities Depository presented proposed improvements to its support for voting rights that it is considering based on the researchers’ recommendations. Broadridge explained a service model that could support the proposed improvements, and attorney Jeong Seonggu presented legal considerations for introducing new services.

Drawing on the discussions at the seminar and the range of opinions from market participants, the Korea Securities Depository plans to work with relevant institutions to develop concrete institutional and practical measures to improve the support system for exercising voting rights in foreign-currency securities. Lee Yunsu, president of the Korea Securities Depository, said, “I hope this seminar will facilitate communication among relevant institutions and market participants and lead to effective measures to support the exercise of voting rights in U.S. stocks.”

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