FINANCE

Nasdaq Proposes Stricter IPO Rules, Raising Bar for Smaller Chinese Listings

Published: Sep. 5, 2025 4:29 a.m. GMT+8

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The Nasdaq MarketSite in New York on July 9, 2025. Photo: Bloomberg

Nasdaq is moving to tighten its listing standards, a step that could sharply limit the flow of smaller Chinese companies onto the exchange even after U.S. audit disputes have been resolved.

In a proposal announced Wednesday, the exchange said it would raise the minimum public float and fundraising requirements for new listings, while enforcing faster suspension and delisting procedures for companies that fail to meet ongoing standards.

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Nasdaq proposed stricter listing standards, raising minimum public float for income-based listings from $5 million to $15 million and requiring China-based IPOs to raise at least $25 million.
The new rules could reduce Chinese IPOs on Nasdaq by 40-50% in H2 2025; in 2024, nearly 70% of Chinese Nasdaq IPOs raised under $10 million.
The changes aim to protect investors and boost market integrity by discouraging small, illiquid, speculative IPOs.

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What Happened When

2021：: Nasdaq adopted its 'restrictive markets' policy, targeting jurisdictions where auditors could not be inspected by the PCAOB; Chinese companies had to raise at least $25 million or 25% of post-offering market value.

2022：: Public Company Accounting Oversight Board (PCAOB) signed an agreement with Chinese regulators granting inspection access.

2024：: 156 Chinese companies received regulatory approval to list overseas, including 99 in Hong Kong and 56 in the U.S. (47 on Nasdaq); nearly 70% of Chinese IPOs on Nasdaq raised less than $10 million, and only eight offerings exceeded $20 million.

First half of 2025：: 70 Chinese companies received regulatory approval to list overseas, with 52 choosing Hong Kong and 13 applying for Nasdaq.

2025-09-03：: Nasdaq announced proposal to tighten listing standards, including raising minimum public float and fundraising requirements, and enforcing faster suspension and delisting procedures.

AI generated, for reference only