Nasdaq has proposed tougher requirements for companies seeking to list on its exchange, targeting thinly traded securities and firms based in China amid growing regulatory scrutiny of market risks.
In a filing with the U.S. Securities and Exchange Commission (SEC), the exchange said it aims to raise minimum liquidity and compliance standards for new listings. The proposal would require companies to demonstrate stronger investor demand and trading activity before qualifying for a Nasdaq debut.
The move comes after years of concern over low-volume stocks that can be vulnerable to manipulation and sudden volatility. Nasdaq also cited risks tied to China-based issuers, where U.S. regulators often face challenges in accessing audits and verifying financial disclosures. 
“Strengthening our listing standards will protect investors, enhance market integrity, and ensure that companies on Nasdaq meet the highest transparency benchmarks,” the exchange said in its statement.
The proposal follows increased oversight from U.S. authorities, including the SEC’s heightened focus on foreign issuers under the Holding Foreign Companies Accountable Act (HFCAA). Several Chinese firms have faced delisting threats in recent years after failing to comply with audit inspection requirements.
If approved, the tighter rules could make it more difficult for smaller or foreign companies to list on Nasdaq, potentially shifting them to less regulated exchanges. The changes are now open for public comment before the SEC decides on implementation.
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