SK Hynix ADR and its Korean common shares will be eligible for swap at month-end, though arbitrage trades are expected to be difficult to execute.

SK Hynix ADRs and its South Korea-listed common shares are set to open for two-way conversion by the end of this month, though the arbitrage trades individual investors had hoped for are unlikely to materialize. While the two instruments are interchangeable in principle, investors may not be able to convert them as freely as trading regular stocks. The Korea Securities Depository (KSD) said on the 16th that mutual conversion between SK Hynix ADRs and its South Korean common shares will be possible after the 29th, the scheduled listing date of the newly issued South Korean common shares. However, the actual conversion process is subject to multiple conditions. Conversion of South Korean common shares to ADRs can only be done within the ADR issuance limit set by the issuer. For instance, if the ADR issuance limit corresponds to 1 million common shares, and 900,000 shares have already been issued, only 100,000 shares are available for additional conversion. In contrast, converting ADRs back to South Korean common shares is not subject to a separate issuance limit. Industry insiders note that individual investors will struggle to use this as a practical investment strategy. Converting common shares to ADRs requires a separate application through a securities firm, and involves procedures such as foreign exchange conversion. Each securities firm handles the process differently, so conversion cannot be completed instantly via mobile or online trading systems like regular stocks. (Jinshi)