According to a Korea Securities Depository official, SK Hynix confirmed that its plan to buy back and cancel 24 million shares will not affect investors’ ability to convert Seoul-listed shares into American depositary receipts (ADRs). The official said the maximum number of Seoul-listed shares that can be converted into ADRs is fixed, not a floating ratio, so it will not be affected by the buyback and cancellation plan.

According to Sina Finance, information on the KSD website shows that since SK Hynix’s ADR listing, the conversion cap has remained at 17,790,000 Seoul-listed common shares and has now been fully used. The official said this is one of the key reasons the ADR premium over the Seoul-listed shares has risen sharply, reaching as high as 44% on Wednesday. The official added that because the ADR cap set by the U.S. Securities and Exchange Commission is a fixed number of shares, canceling about 3.3% of local shares will not actually reduce the original conversion capacity, and that some short-term compression in the premium is expected over the next three months as heavy local buying by Hynix accelerates gains in the local price.