Nasdaq has proposed a new rule requiring companies operating primarily in China to raise at least US$25 million from their public offering to list in the US.

The move aims to address risks from small Chinese IPOs, especially microcap firms with market capitalizations between US$50 million and US$300 million, citing compliance concerns and challenges for US investors to take legal action against manipulative trading.

If approved by the US Securities and Exchange Commission, companies already in the IPO process will have 30 days to complete their listing under current rules.

All future listings must meet the new requirement.

The change comes amid US-China tensions, with China recently announcing new tariffs on some US optical fiber producers.

In 2024, 35 small China-based companies listed in New York, about double the number of similar US-based microcap IPOs.

🔗 Source: CNBC

Update: (September 4, 4:59 p.m. SGT): This article has been updated to clarify that Chinese companies have to raise at least US$25 million IPO for a Nasdaq listing, instead of paying a US$25 million fee. The original CNBC story initially referred to the latter version.