[Edaily Reporter Park Sun-Yeop ] SK hynix(000660) The mutual conversion between SK Hynix’s domestic shares in Wonju and its American Depositary Receipts (ADRs) is expected to become possible starting on the 29th of this month. Since the stock prices of the domestic shares and the U.S. ADRs diverged during the early stages of the ADR listing, creating a price gap, it remains to be seen whether the start of mutual conversion will serve as an opportunity to narrow the disparity between the two markets.
According to the Korea Securities Depository (KSD) on the 15th, the mutual conversion of SK hynix’s domestic shares and ADRs is scheduled to be processed through the same infrastructure used for other previously issued depositary receipts (DRs).
The Korea Securities Depository will announce the specific mutual conversion schedule to the market in accordance with instructions from Citibank, the ADR depositary bank. Applications for conversion are expected to be accepted starting on the 29th, the scheduled date for the domestic listing of the relevant shares, which is Onejoon Co., Ltd.

However, the conversion conditions vary depending on the direction. When converting domestic shares into ADRs, conversion is limited to the ADR issuance limit set by the issuer. Upon application by investors and the DR depositary, KSD verifies the existing issuance volume and conversion ratio before processing the request within the remaining limit.
For example, if the allowable ADR issuance volume is 1 million domestic shares and the ADRs already issued are equivalent to 900,000 domestic shares, the volume available for additional conversion is limited to 100,000 shares. Once the issuance limit is fully exhausted, further conversion is difficult even if the investor holds domestic shares.
On the other hand, no separate issuance limit applies when redeeming ADRs and converting them back to domestic underlying shares. When an investor applies to redeem DRs, the shares held in the account of the overseas custodian are transferred to the applicant’s domestic securities account.
The Korea Securities Depository (KSD) explained that, aside from exceeding the issuance limit, there are generally no major restrictions, but DR depositories and other entities may impose separate conditions.
The market is closely watching how quickly the price gap between domestic shares and ADRs will narrow once mutual conversion begins. Since the volume converted from domestic shares to ADRs is subject to the remaining issuance limit, actual conversion demand and the remaining available issuance volume are seen as key variables that will determine the pace at which the price disparity is resolved.