Following recent accounting scandals at Chinese firms, Nasdaq has made a filing with the US Securities and Exchange Commission (SEC) that proposes to “apply additional initial listing criteria for companies primarily operating in a jurisdiction that has secrecy laws, blocking statutes, national security laws or other laws or regulations restricting access to information by regulators of U.S. listed companies.”
The proposal, approved on May 18, will require companies from countries falling within those criteria—widely assumed to include China—to raise either a minimum of USD 25 million in IPO or at least 25% of their post-offering market valuation. The proposal also includes stricter accountability standards to qualify for listing.
Although the proposed rules don’t point China out specifically, it comes after a string of high-profile scandals surrounding Chinese firms including Luckin Coffee, video platform iQiyi, and edtech company GSX Techedu.
This article is part of KrASIA’s “China Brief” section, where KrASIA’s reporters will provide quick daily updates about the tech ecosystem in China.
