Greenberg Traurig, LLP’s Post

On May 14, 2026, the U.S. Securities and Exchange Commission approved Nasdaq’s proposed rule change (https://bit.ly/4eUnunw) to its initial listing standards, which will require companies primarily operating in China, including Hong Kong and Macau, to raise at least $25 million in IPO proceeds to qualify for listing on Nasdaq. Nasdaq first submitted the proposal in September 2025, and the SEC approved it after three amendments and multiple delays. In adopting the proposed rule change, the SEC noted that China-based companies seeking U.S. listings may present heightened fraud and market manipulation risks. From August 2022 to April 2025, about 70% of Nasdaq’s enforcement case referrals to the SEC or FINRA relating to market manipulation involved Chinese companies, even though those companies accounted for less than 10% of Nasdaq listings during that period. Since September 2025, the SEC has suspended trading in the securities of 14 companies, many with ties to mainland China or Hong Kong, due to suspicious trading patterns. The SEC also formed the Cross-Border Task Force within the Enforcement Division to investigate potential violations of the federal securities laws by foreign-based companies. Nasdaq believes that the smaller offering sizes, lower public float percentages, and limited investor base of China-based companies make their securities more susceptible to manipulation, including insider trading and pump-and-dump schemes. Nasdaq also cites concerns about potential undisclosed ownership by the Chinese government, the broader influence of Chinese authorities over the Chinese economy and Chinese companies, and the practical difficulties of enforcing U.S. laws and collecting judgments in China as reasons for adopting the proposed rule change. Given these risks, the SEC concluded that approval of the proposed rule change was appropriate. Read this #GTAlert by Barbara A. Jones, Marc Rossell, Tiange (Tim) Chen, and Yangyang Jia: https://bit.ly/4fuoMFP. #GTCorporate #Nasdaq #SEC #ChinaIPO #CapitalMarkets #CrossBorderFinance #SecuritiesLaw