Things to Watch Out for When a Corporate Action Occurs on an Overseas Stock

Not long ago in the overseas stock market, the U.S. stock Magic Empire Global saw a sharp surge in its share price. Investors at a domestic securities firm who held it tried to sell, but they could not place orders because the securities firm said it was a stock prohibited from being sold.
The reason was the stock's reverse split
The domestic securities firm had never officially received the corporate action information about the reverse split of this stock from overseas, so it could not carry out the work of reducing the number of shares held.
With a 4:1 reverse split, 100 shares become 25 shares, and an order for 100 shares must not go out while the balance has not been reduced.
In fact, you can see the recent incident in which a domestic securities firm failed to process the corporate action related to the merger of Nasdaq-listed Hydma, resulting in erroneous orders that were then canceled, in the same context.

When you trade stocks in the domestic market, all securities held by investors are kept at the Korea Securities Depository, which manages the balances. And when a corporate action arises on a stock, the Korea Securities Depository takes responsibility for delivering the related information to securities firms.
Securities firms use the information received in this way to process the work in advance so that tasks arising from corporate actions are handled properly.

However, the reason such situations occur with overseas stocks, unlike domestic stocks, is that for overseas stocks, overseas institutions called sub-custodians perform work like that of Korea's securities depository.
When you trade U.S. stocks, the shares are held and the accompanying work is handled through the following process.

1. A domestic investor buys U.S. stocks through a domestic securities firm (Kiwoom Securities, Mirae Asset Securities, Samsung Securities, etc.).
2. The domestic securities firm works with overseas brokers (Interactive Brokers, Goldman Sachs, Morgan Stanley, etc.) to deliver orders to the U.S. stock market (NYSE, NASDAQ, etc.).
3. U.S. stocks bought by domestic investors are held at the DTCC (Depository Trust & Clearing Corporation), the U.S. central securities depository, or in the broker's account.
4. The Korea Securities Depository (KSD) does not hold them directly, but works with overseas custodians to indirectly manage domestic investors' shareholding records.
Here, companies such as Goldman Sachs, listed as brokers, act as sub-custodians, and it can be seen that the problem arose because these companies delivered the corporate action information late.
Since each securities firm is connected to different brokers, not all securities firms will run into the same problem at the same time, but unless they take responsibility for the work as the Korea Securities Depository does domestically, it seems overseas stock investors will have no choice but to bear such damage.

If you learn that a corporate action is coming for an overseas stock you hold, please check with your securities firm in advance.
It seems the securities firm may not know about it