The US exchange Nasdaq has proposed a US$25 million fee for IPOs of Chinese companies, a popular venue for raising money because domestic exchanges are more troublesome due to government regulations. The move will pose a major barrier, especially for the smaller firm from China, says financial analyst Winston Ma at CNBC.
CNBC:
The Nasdaq stock exchange in the U.S. is planning listing requirements that will make it harder for small Chinese companies to list in New York, after a flood of tiny initial public offerings.
As part of proposed changes, companies operating primarily in China will need to raise at least $25 million in initial public offerings to list on the exchange, Nasdaq said late Wednesday local time.
The move comes as tensions between the U.S. and China simmer, and as the Nasdaq faces broader financial market issues.
“It will be more difficult for small Chinese companies to go IPO [on the] Nasdaq under the new rule,” said Winston Ma, adjunct professor at NYU School of Law. “The new rule reacts to some IPO cases of ‘pump and dump’ due to small float size.”
There have been been few large Chinese IPOs in the U.S. since the fallout around ride-hailing company Didi’s New York listing in 2021. But in 2024, 35 small China-based companies listed in New York, roughly twice the 17 U.S.-based microcap listings, Renaissance Capital said in December.
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