Business

Exclusive: Nasdaq to tighten listing rules, restricting Chinese IPOs – sources

Your ads will be inserted here by

Easy Plugin for AdSense.

Please go to the plugin admin page to
Paste your ad code OR
Suppress this ad slot.

Business

Nasdaq Inc is set to unveil new restrictions on initial public offerings (IPOs), a move that will make it more difficult for some Chinese companies to debut on its stock exchange, people familiar with the matter said on Monday.

FILE PHOTO: People work in the client experience space at the Nasdaq Market site in New York, U.S., May 2, 2019. REUTERS/Brendan McDermid

19 May 2020 08:35AM

Share this content

Bookmark

NEW YORK: Nasdaq Inc is set to unveil new restrictions on initial public offerings (IPOs), a move that will make it more difficult for some Chinese companies to debut on its stock exchange, people familiar with the matter said on Monday.

While Nasdaq will not cite Chinese companies specifically in the changes, the move is being driven largely by concerns about some of the Chinese IPO hopefuls' lack of accounting transparency and close ties to powerful insiders, the sources said.

Advertisement

Advertisement

Your ads will be inserted here by

Easy Plugin for AdSense.

Please go to the plugin admin page to
Paste your ad code OR
Suppress this ad slot.

At a time of escalating tensions between the United States and China over trade, technology and the spread of the novel coronavirus, Nasdaq's curbs on small Chinese IPOs represent the latest flashpoint in the financial relationship between the world's two largest economies.

Nasdaq also unveiled some restrictions on listings last year, seeking to curb IPOs by small Chinese companies. Their shares often trade thinly because most stay in the hands of a few insiders. Their low liquidity makes them unattractive to many large institutional investors, to whom Nasdaq is seeking to cater.

The new tightening of the listing standards reflects the bourse operator's ongoing concerns about some Chinese companies seeking U.S. IPOs. Last month, Luckin Coffee , which had a U.S. IPO in early 2019, announced that an internal investigation had shown its chief operating officer and other employees fabricated sales deals.

The new rules will require companies from some countries, including China, to raise US$25 million in their IPO or, alternatively, at least a quarter of their post-listing market capitalization, the sources said.

Advertisement

Advertisement

This is the first time Nasdaq has put a minimum value on tRead More – Source