Korea Securities Depository and Citibank discuss ways to improve support for voting rights in U.S. stocks

[Financial News] As domestic investors’ holdings of U.S. stocks have increased, discussions have been held on improving procedures for exercising voting rights in U.S.-listed stocks. The aim is to develop ways to support investors’ exercise of shareholder rights by examining both the multilayered structure for holding overseas stocks and the domestic and international legal relationships involved.
Korea Securities Depository said on the 27th that it had co-hosted a seminar with Citibank in Busan on the 26th titled “Legal Status and Shareholder Rights of Holders of U.S.-Listed Securities: Current Status and Challenges.” Around 60 people attended, including representatives of proxy voting agency Broadridge and staff responsible for foreign-currency securities business at 11 securities firms.
The legal status of U.S.-listed stocks held by domestic investors and the process for exercising voting rights were key topics at the seminar. Researchers from Seoul National University explained that, because U.S. stocks held by domestic investors are managed through a multilayered holding structure, it is necessary to comprehensively review not only domestic law but also the custody agreement between Korea Securities Depository and Citibank, as well as U.S. state laws.
The seminar also compared procedures for domestic investors to exercise voting rights in U.S. stocks with those for foreign investors to exercise voting rights in domestically listed stocks. Legal experts presented the legal implications of domestic investors exercising shareholder rights through foreign custodians, as well as proposals to improve Korea Securities Depository’s support for the exercise of shareholder rights.
Securities firms, Korea Securities Depository, Broadridge and legal experts then discussed ways to improve current procedures for exercising voting rights in foreign-currency securities and related legal issues. Korea Securities Depository outlined improvement measures under review based on the researchers’ proposals, while Broadridge explained a service model that could support them.
“I hope this seminar will serve as an opportunity for relevant institutions and market participants to communicate smoothly and develop effective measures to support the exercise of voting rights in U.S. stocks,” said Lee Yun-su, president of Korea Securities Depository.
Korea Securities Depository plans to work with relevant institutions, based on opinions expressed at the seminar, to develop concrete institutional and practical measures to improve the support system for exercising voting rights in foreign-currency securities.
[email protected] Bae Han-geul Reporter