Nasdaq Tightens Rules for China-Based Company Listings
Published Date: 9/19/2025
Notice
Summary
Nasdaq is adding new rules for companies mostly doing business in China, including Hong Kong and Macau, before they can list their stocks. These changes aim to make sure these companies meet higher standards, helping protect investors and keep the market strong. The new rules could affect when and how Chinese companies go public on Nasdaq, starting soon after the SEC reviews the proposal.
Analyzed Economic Effects
6 provisions identified: 1 benefits, 5 costs, 0 mixed.
IPO Minimum: $25 Million Required
If your company is primarily operating in China and seeks an IPO on Nasdaq, a firm-commitment offering in the United States must result in gross proceeds to the company of at least $25,000,000. Companies subject to this rule must also meet all other applicable Nasdaq listing requirements.
Business Combinations Need $25M Public Float
If a company primarily operating in China seeks to list on Nasdaq via a business combination (e.g., de-SPAC), the post-business combination entity must have a Market Value of Unrestricted Publicly Held Shares of at least $25,000,000. Market Value of Unrestricted Publicly Held Shares excludes shares subject to resale restrictions.
How Nasdaq Defines "Chinese" Companies
If your company is headquartered or incorporated in China (including Hong Kong and Macau) or its business is principally administered there, Nasdaq would treat it as a Chinese company. Nasdaq will consider a company principally administered in that jurisdiction if, among other things, its books and records are located there or at least 50% of its assets, revenues, directors, officers, or employees are in that jurisdiction, or it is controlled by persons or entities who are citizens of, reside in, or are headquartered or principally administered there.
Direct Listings Blocked on Nasdaq Capital Market
A company primarily operating in China will not be permitted to list on the Nasdaq Capital Market (NCM) in connection with a Direct Listing. Such companies may list by Direct Listing only on the Nasdaq Global Select Market (NGS) or the Nasdaq Global Market (NGM) if they meet the applicable (enhanced) listing requirements for those tiers.
Transfers Require One-Year Seasoning and $25M
A company primarily operating in China that seeks to transfer its listing from the OTC Market or another national securities exchange to Nasdaq must have first traded on that other market for at least one year and must have a minimum Market Value of Unrestricted Publicly Held Shares of at least $25,000,000. Nasdaq also requires companies transferring without an offering to meet this $25 million public float threshold.
30-Day Delay After SEC Approval
Nasdaq proposes that the new requirements become effective 30 days after the Commission's approval order. Companies that have taken substantial steps to list under the current rules may complete that process if their listing occurs before the 30-day post-approval effective date.
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