Nasdaq Tightens IPO Regulations... "Chinese Companies Face Greater Challenges in Fundraising"

[Asia Economy Beijing=Special Correspondent Park Sun-mi] The Nasdaq, a US stock market, is expected to make it more difficult for Chinese companies to raise funds by tightening regulations on initial public offerings (IPO).

According to major foreign media including the South China Morning Post (SCMP) in Hong Kong on the 19th, Nasdaq is set to announce new, stricter IPO regulations soon. Sources said that the new regulations will require companies from certain countries, including China, to either have an IPO size of at least $25 million or, if not, to mandatorily raise at least one-quarter of their post-listing market capitalization.

This is the first time Nasdaq has set a minimum mandatory fundraising amount in its IPO regulations. Although the new rules will not explicitly target Chinese companies, among the 155 Chinese companies listed on Nasdaq since 2000, 40 conducted IPOs smaller than $25 million. Therefore, if the new regulations are applied, Chinese companies' IPOs will inevitably face significant obstacles.

Nasdaq's move comes amid concerns over the lack of accounting transparency among Chinese companies and the fact that most shares are traded by a small number of insiders. However, given that this measure is being considered amid US-China conflicts over trade, technology, and responsibility for the spread of COVID-19, it can also be interpreted as a deliberate financial market sanction by the US against Chinese companies.

This content was produced with the assistance of AI translation services.