해외상장과 유가증권예탁결제제도 = Foreign Market Listing and Securities Deposit & Settlement System

다국어 초록 (Multilingual Abstract)

More and more attention is being paid to foreign market listing as crossborder securities transactions are considerably increasing with globalization.
Foreign market listing can be done in two forms: depositary receipts (DR) or share certificates. Corporations can issue and list DR overseas for the shares they issue in the domestic market or list their share certificates directly on overseas exchanges. In the meantime, the securities deposit and settlement system, which was introduced to facilitate securities transactions, also plays an important role in overseas listing.
If a country’s securities deposit and settlement system is linked with that of another country through CSD (Central Securities Depository) linkage, share-listing on overseas exchanges is possible, even in the case where shares are issued in the domestic market and deposited with the domestic CSD. In this case, entitlement processing for foreign investors could be taken care of through CSD linkage. But, custody and corporate action services have been provided by global custodians, who started their services even before the establishment of CSDs.
Therefore, it is true that this new approach of CSD linkage has many difficulties to overcome.
If CSD linkage is not easy to accomplish, which is true in current situation, issuing and listing share certificates overseas could be an option, but not a desirable one. Issuing share certificates in a foreign country could cause a conflict between the legal system of the foreign country and that of the country where the issuer is resided, and arise many problems concerning corporate action.
All of the problems could be solved with overseas DR listing. DR is foreign securities issued overseas as the receipts of the shares issued and deposited in the domestic market. Therefore, a possible conflict of the legal systems is rare, and corporate action can be processed without difficulties by taking advantage of the DR custodian network with the local custodian for shares.
In addition, DR enables timely arbitrage, which is difficult in the case of overseas listing in the form of share certificates.
Corporations, which co-list their shares on multiple exchanges, will have to make every effort to take necessary steps so that their overseas investors can conveniently exercise their rights, along with their effort to raise their fundamental value with sound financial structure and bright outlook. And DR could be used as one of the desirable means for them to reach the goal.