Nasdaq enforces stricter IPO rules to enhance market integrity

On September 3, 2025, Nasdaq announced its intention to amend its listing standards, which could significantly influence cross-border, micro-cap IPOs, particularly those from Asia and China. The proposed changes aim to increase the minimum public float size for companies meeting the net income standard from $5 million to $15 million, while listings from China would need a minimum offering size of $25 million. This follows a previously approved SEC rule from October 2021, targeting companies in 'restrictive markets.' The implications of these changes are substantial, as many smaller firms gearing up for public listings may find themselves unable to meet the new financial requirements, putting their plans in jeopardy. Additionally, Nasdaq noted that a significant portion of cross-border listings has been comprised of Asian IPOs, emphasizing the role these smaller companies play in the market. The review was sparked by concerns over potential market integrity issues and various irregular trading practices observed in recent cross-market trading activities. The proposal represents an effort to safeguard investor interests while taking into account the unique challenges associated with smaller IPOs, which often put a strain on Nasdaq's compliance resources. As the SEC deliberates on these new rules, it could take months before they are fully implemented, giving companies time to evaluate their options and restructure to comply with the forthcoming standards, including potentially relocating operations to regions like Singapore. Both the investment banking sector and smaller companies will need to adapt to this evolving landscape, with implications for future cross-border and micro-cap IPO viability.