Nasdaq today proposed higher listing thresholds—including a $15 million minimum market value of public float for net-income standard IPOs, a $25 million minimum public-offering proceeds for companies principally operating in China, and an accelerated suspension or delisting process for firms with a listings deficiency and market value of listed securities below $5 million.
The exchange said the updates aim to reinforce capital formation while “ensuring investor protection and upholding market integrity.”
John Zecca, Global Chief Legal, Risk & Regulatory Officer, said that by increasing the standards for the minimum public float and the public offering raise in certain new listings, this will provide “a healthier liquidity profile for public investors.”
“These new listing standards represent one step in a necessary, industry-wide effort… to closely examine trading behaviors in small company securities,” he added.
Nasdaq said the move follows a review of trading activity, including patterns associated with potential pump-and-dump schemes across US markets, and recalibrates minimum liquidity standards to today’s valuations and trading dynamics.
The $25 million minimum public-offering proceeds requirement for China-operating companies is a move to align it with the $25 million threshold established in its 2020 “restrictive markets” rule set.
Nasdaq is filing the proposals with the SEC. If approved, companies already in the initial listing pipeline would have 30 days to complete under prior standards. Thereafter, all new applicants must meet the new thresholds.
Nasdaq added it will continue to refer potentially manipulative activity to the SEC and FINRA and deepen cooperation with domestic and international regulators.
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