Nasdaq unveils new listing rules to clamp down on stock manipulation, Chinese firms

Wed, Sep 3, 2025, 7:46 PM 3 min read

By Anirban Sen and Mrinmay Dey

NEW YORK (Reuters) -Exchange operator Nasdaq is introducing stricter listing standards including a higher minimum public float for some new listings and a faster process to delist thinly traded companies, part of a broader effort to crack down on potential market manipulation.

Nasdaq said in a statement on Wednesday that the changes follow a review of trading activity, including patterns associated with “potential pump-and-dump schemes in U.S. cross-market trading environments,” referring to manipulative schemes which aim to push up share prices.

The new rules aim to raise minimum liquidity standards, among other changes.

Nasdaq also said it would require companies primarily operating in China to raise a minimum of $25 million in public offering proceeds to qualify for listing.

Nasdaq has conducted a years-long investigation aimed at clamping down on wild stock rallies of smaller companies from China, following a surge in recent years of shares of such companies that raise small amounts in their IPOs.

Investors have been heavily bruised by some of these listings, as some Chinese stocks have risen as much as 2000% in their debuts, only to nosedive in the following days.

The New York-based exchange operator said it submitted the proposed rules to the U.S. Securities and Exchange Commission for review, and if approved, planned to implement them promptly.

Wall Street’s top regulator in June singled out China as it sought to raise disclosure requirements for companies hoping to list on U.S. exchanges.

A record number of Chinese companies are seeking to list in the U.S. this year, driven by onerous domestic rules and the prospect of better valuations despite volatile Sino-U.S. relations and regulatory scrutiny.

Under the proposal, new listings under Nasdaq’s net income standard would require a minimum $15 million market value of public float. The current threshold is at least $5 million.

The exchange operator also proposed a faster suspension and delisting process for companies with listing deficiencies and a market value of listed securities below $5 million.

“These enhancements reflect our ongoing commitment to evolve our standards in step with market realities,” John Zecca, Nasdaq’s executive vice president and global chief legal, risk and regulatory officer, said in the statement.

He added that higher minimums are intended to improve liquidity for public investors.

Nasdaq said it would continue to refer potentially manipulative trading to the SEC and the Financial Industry Regulatory Authority, and deepen cooperation with domestic and international regulators.