Nasdaq is revising the rules to allow it to decline a stock listing application when it detects a red flag, even if the applicant meets all requirements. The move is aimed at preventing sharp market fluctuations and allegations of stock manipulation, which are frequent in small IPOs, many of which are headquartered in Asia. According to plans outlined in documents submitted to the US Securities and Exchange Commission on Friday, NASDAQ may consider where the company is located, whether US investors have access to legal remedies in relevant jurisdictions, and whether the company's advisors have participated in problematic or unusual transactions with other securities. This will allow Nasdaq to weigh concerns about the integrity of the company's board of directors, management, major shareholders, or advisors. Current rules do not allow NASDAQ to decline listing applications based on trading models or considerations relating to the company's advisors. Nasdaq stated in the document, “If Nasdaq believes that the applicant's securities are more susceptible to manipulation based on comparable tenders or when similar advisors are involved, these proposed factors will make this situation more transparent.”

Nasdaq is revising the rules to allow it to decline a stock listing application when it detects a red flag, even if the applicant meets all requirements. The move is aimed at preventing sharp market fluctuations and allegations of stock manipulation, which are frequent in small IPOs, many of which are headquartered in Asia. According to plans outlined in documents submitted to the US Securities and Exchange Commission on Friday, NASDAQ may consider where the company is located, whether US investors have access to legal remedies in relevant jurisdictions, and whether the company's advisors have participated in problematic or unusual transactions with other securities. This will allow Nasdaq to weigh concerns about the integrity of the company's board of directors, management, major shareholders, or advisors. Current rules do not allow NASDAQ to decline listing applications based on trading models or considerations relating to the company's advisors. Nasdaq stated in the document, “If Nasdaq believes that the applicant's securities are more susceptible to manipulation based on comparable tenders or when similar advisors are involved, these proposed factors will make this situation more transparent.”