1. Cross-Listing Angie Sun

2. 1994 Listed on Korea Stock Exchange 2001 Listed on New York Stock Exchange What is Cross-Listing?

3. A firm lists its equity shares on one or more foreign stock exchange in addition to its domestic exchange.

4. What is Cross-Listing? Source: Cross-Listing of Korean Companies on Foreign Exchanges: Law and Policy, Hwa –Jin Kim

5. What is Cross-Listing? GDRs (Global Depositary Receipt) -A firm’s equities traded in the foreign market -Not necessarily issued in foreign market -Bank’s role in issuing GDRs

6. What is Cross-Listing? Sponsored GDRs vs. Non-sponsored GDRs Kookmin Bank Bank/Brokerage Firm (one) Exclusively issuing Sponsored GDRs Seeks to sell shares in foreign market Bank/Brokerage Firm (one or more) Non-Sponsored GDRs Assembling Kookmin shares and issuing Without participati on of Kookmin

7. What is Cross-Listing? ADRs (American Depositary Receipt) Ownership in the shares of a foreign company trading on US financial markets. KSD (Korea Securities Depositary) Established under the Korean Securities and Exchange Act to assist Korean companies’ cross-listing.

8. What is Cross-Listing? Euroequity A stock issue offered simultaneously in several countries by an international syndicate US Corporatio n Primary US Component Euroequity Tranche

9. Why Cross-Listing? Corporation’s Perspective Diversification of capital source, Lower cost of capital Diminishing prospect of takeover by other domestic firms Boosting company’s name awareness and thereby a higher stock price Segmentation of regulation: avoid certain regulations Improving the labor relations in foreign countries Enhancing the visibility of the company’s products in the foreign marketplace and boosting foreign sales

10. Why Cross-Listing? Nation’s Perspective Policy trend of dispersed ownership and decentralization of economic power Support start-up companies Boost globalization of financial infrastructure Establishing strategic alliance and cooperative relationships with foreign securities markets “Bonding”: global visibility; improving corporate governance and managerial accountability

11. Why Not Cross-Listing? Increased pressure on executives due to closer public scrutiny Litigation risk: increased reporting and disclosure requirements Additional scrutiny by analysts in advanced market economics Transaction costs: additional listing fees, compliance costs etc. Volatility spillover from overseas market and dilution of domestic controlling interest

12. Is Cross-Listing the Future? YES! Convergence of corporate governance Globalization of financial market NO! Divergence of corporate governance Regulatory barriers (Sarbanes-Oxley Act 2002)