Korea Exchange (KRX) and the New York Stock Exchange (NYSE) are pursuing a new memorandum of understanding 22 years after their first agreement in September 2004. The new MOU focuses on four cooperation areas: supporting dual listings between Korean and US markets, sharing experience on settlement cycle reduction, collaborating on 24-hour trading systems, and exchanging information on token securities markets. The shift marks a transition from symbolic exchange to substantive business cooperation, with a US energy storage system company with approximately $800 million market capitalization currently discussing a secondary listing of Korean Depositary Receipts (KDR) on KOSDAQ. The development reflects growing interest from US-listed companies in accessing Korean investors through secondary listings, supported by Korea's rising market status following KOSPI gains since last year.
US ESS Company Discusses KOSDAQ Secondary Listing
A US energy storage system (ESS) company listed on the NYSE is in discussions with Korea Exchange regarding a secondary listing of Korean Depositary Receipts on KOSDAQ. The company has a market capitalization of approximately $800 million and is considering maintaining its original shares on the US market while issuing KDRs to Korean investors. If the listing proceeds, it would mark the first case of a major US exchange-listed company adding a KDR listing on KOSDAQ. An additional four to five US-listed companies are exploring secondary listings in Korea.
KRX and NYSE to Share T+1 Settlement Experience
The United States shortened the settlement cycle for most securities transactions from T+2 (two days after trade date) to T+1 (one day after trade date) in May 2024. Korea plans to release a roadmap for reducing its stock settlement cycle from T+2 to T+1 in October. Under the new MOU, Korea Exchange will receive information about the US transition process, including system upgrades and responses by securities firms and custodian institutions.
Exchanges Plan Cooperation on 24-Hour Trading and Token Securities
The cooperation agreement includes information exchange on 24-hour trading operations. NYSE is developing a blockchain-based trading platform that enables 24-hour stock trading. The exchanges will also share information on token securities markets and regulatory frameworks. The cooperation aims to reduce uncertainty and costs in the preparation process by exchanging information on listing, disclosure, and depositary systems in both countries and connecting working-level staff.
FAQ
What is the focus of the new MOU between Korea Exchange and NYSE?
The new memorandum of understanding focuses on four cooperation areas: supporting dual listings between Korean and US markets, sharing experience on settlement cycle reduction, collaborating on 24-hour trading systems, and exchanging information on token securities markets and regulatory frameworks.
Which US company is discussing a secondary listing on KOSDAQ?
A US energy storage system company listed on the NYSE with approximately $800 million market capitalization is in discussions with Korea Exchange about listing Korean Depositary Receipts on KOSDAQ while maintaining its original shares on the US market. An additional four to five US-listed companies are exploring Korean secondary listings.
