Nasdaq Raises Bar for China Firms Seeking U.S. Listings
Published Date: 5/19/2026
Notice
Summary
Nasdaq is raising the bar for companies from China, Hong Kong, and Macau that want to list their stocks on its exchange. These new rules mean only stronger, more transparent companies can join, helping protect investors and boost confidence. The changes kick in soon, so China-based companies should get ready to meet the tougher standards or risk missing out.
Analyzed Economic Effects
7 provisions identified: 2 benefits, 5 costs, 0 mixed.
New $25M IPO Minimum for China-Based Issuers
If your company is headquartered, incorporated, or principally administered in China (including Hong Kong or Macau) and you want to list on Nasdaq through an IPO, you must conduct a Firm Commitment Offering in the United States that raises gross proceeds of at least $25,000,000 to Public Holders. This is an additional initial listing requirement under proposed Rule 5210(l)(i).
Business-Combination Listings Must Show $25M Public Float
If a China-based company lists on Nasdaq in connection with a business combination, proposed Rule 5210(l)(ii) requires the post-business-combination entity to have a Market Value of Unrestricted Publicly Held Shares of at least $25,000,000. This reflects that such listings typically do not include an offering.
Direct Listings Restricted to NGS for China Firms
A company headquartered, incorporated, or principally administered in China that seeks to list via a Direct Listing must meet all Nasdaq Global Select Market (NGS) requirements and related rules, and will not be permitted to list on the Nasdaq Global Market (NGM) or Nasdaq Capital Market (NCM) via a Direct Listing, even if it otherwise meets NGM/NCM requirements (proposed Rule 5210(l)(iii)).
One-Year Seasoning and $25M Float for Transfers
A China-based issuer that initially trades on the OTC market or on another national securities exchange must trade on that market for at least one year before it may list on Nasdaq, and must have a Market Value of Unrestricted Publicly Held Shares of at least $25,000,000 to be eligible (proposed Rule 5210(l)(iv)).
Broader Tests to Label a Company 'China-Based'
Nasdaq will apply a broadened, seven-factor test to decide whether a company is headquartered, incorporated, or principally administered in China (including Hong Kong and Macau). Factors include whether at least 50% of the company's assets, revenues, directors, officers, or employees are located in that jurisdiction, where books and records are kept, or whether the company is controlled by persons/entities in that jurisdiction. If Nasdaq determines a company is China-based and it does not meet the additional requirements, Nasdaq would deny the listing application (with an appeal right under Rule 5800 Series).
Rules Aim to Strengthen Investor Protections
Nasdaq states the additional listing criteria for China-based companies are intended to increase investor protections and ensure sufficient liquidity and distribution so that listed securities support meaningful price discovery and fair and orderly trading.
30-Day Delay After Approval to Implement Rules
Nasdaq proposes the new China-based listing requirements to become effective 30 days after the Commission's approval, giving companies a short transition period to adjust to the changes.
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