Nasdaq revises listing standards to limit volatility
Nasdaq is implementing significant changes to its listing standards to enhance liquidity and boost market transparency. The exchange is responding to new realities by tightening requirements for companies entering the U.S. public market. At the same time, Nasdaq is balancing access to capital with investor protection.
Key changes
The exchange is tightening control over the quality of issuers. Nasdaq has noted an increase in volatility and suspicious trading strategies, especially among small companies. Therefore, Nasdaq is proposing three key innovations:
The minimum market value of publicly traded shares is US$15 million. This applies to all companies that go public under the net income standard.
A faster suspension and delisting procedure. Nasdaq is tightening control over companies if the market value of their securities falls below US$5 million.
Companies that conduct their main activities in China must now raise a minimum of US$25 million during a public offering.
In this way, Nasdaq aims to improve the quality of the public market and strengthen investor confidence.
John Zecca, Nasdaq’s executive vice president and chief legal, risk, and regulatory officer, explains the logic behind these innovations. According to Zecca, extreme volatility and signs of manipulation most often affect the securities of small Chinese companies. Therefore, the exchange is strengthening its entry filters, forming a broader free float, and expanding its investor base. Zecca says these steps create conditions for fair trading and deeper liquidity.
The proposed changes build on previous Nasdaq reforms. The exchange regularly reviews its standards and responds to new market trends. The new package is a logical continuation of the work that began in 2020. At that time, Nasdaq introduced additional requirements for IPOs from “restricted markets,” including China and Hong Kong. The exchange set a minimum offering size of US$25 million or 25% of the total securities available to U.S. investors.
Today, Nasdaq is effectively returning to that regulatory logic. Therefore, the new rule requiring a minimum public offering of US$25 million appears to be an updated version of the previous measures, adapted to current market conditions.
The role of joint action in regulation
Nasdaq emphasizes that market protection is a collective responsibility. The exchange is stepping up its cooperation with FINRA, the SEC, and other regulatory bodies. Moreover, Nasdaq reports data on potentially suspicious transactions, including:
– trading in the microcap segment;
– volatility spikes;
– short selling;
– the influence of social media.
These efforts strengthen market discipline and improve oversight quality. Nasdaq confirms that it will continue to update its standards as new risks emerge. The exchange analyzes market behavior, collects feedback from investors and issuers, and regularly adjusts its listing requirements. This approach solidifies Nasdaq’s position as a leader in the global capital market.
