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KDR Depository

KSD plays a role of issuing Korean Depository Receipts (KDR). In the event that foreign stocks are issued and listed in the Korean market, KSD supports the stocks' listing through stock administration agent service other than foreign company's own issuing KDR.

Procedures of KDR depository service

  • KDR conversion

    In case KDR's price is more expensive than that of underlying shares, investors can convert the underlying shares into KDR and sell it in the Korean market. This is an arbitrage transaction that investors can take advantage of price differences.

  • KDR release

    In case underlying share's price is more expensive than that of KDR, investors can take advantage of price differences through claiming on KSD for KDR release, and then selling the underlying shares in a foreign market.

The difference between foreign stocks and KDR issuance

The difference between foreign stocks and KDR issuance : Category, Foreign stocks, KDR
Category Foreign stocks KDR
Issuer
  • Physical share certificates are issued in Korea.
  • Share certificates are issued in foreign countries.
  • Underlying shares are deposited in foreign custodians for the underlying shares.
KSD
  • Playing a role of stock administration agent
  • Handling business for issuance of share certificates and managing shareholders' list
  • Performing as the KDR issuance institution
  • Managing KDR issuers and beneficial KDR holders' list
  • Appointment of local custodian of foreign underlying shares
  • Dealing with works related to custody, settlement, and rights exercise