Nasdaq Proposes 200% Increase in Minimum Public Float for New Listings

On September 3, the Nasdaq proposed modifications to its listing standards, submitting the proposed rules to the U.S. Securities and Exchange Commission for review. These changes are set to be implemented immediately upon approval. The revised standards include a minimum public float market value of 150 million dollars for new companies listing based on net income standards, an increase from the current 50 million dollars. Additionally, companies with listing deficiencies and a market value of securities below 50 million dollars will face accelerated delisting procedures. For new companies primarily operating in China, the minimum amount of funds raised through public offerings is set at 25 million dollars.

The proposed changes aim to enhance the overall quality of listings on the Nasdaq, particularly for smaller IPOs and companies operating in China. The new rules are designed to ensure that companies meet higher financial thresholds, which could potentially reduce the number of smaller, less financially stable companies seeking to list on the exchange. This move is part of a broader effort to improve the integrity and stability of the Nasdaq market, especially in light of recent regulatory scrutiny and market volatility.

The increase in the minimum public float market value to 150 million dollars is a significant change that could impact the ability of smaller companies to go public. This higher threshold may deter some companies from pursuing an IPO on the Nasdaq, as they may struggle to meet the new financial requirements. However, it could also attract more established and financially robust companies, potentially enhancing the overall quality of the listings on the exchange.

The accelerated delisting procedures for companies with listing deficiencies and a market value of securities below 50 million dollars are intended to address concerns about the financial health and stability of listed companies. By expediting the delisting process for companies that fail to meet the necessary financial thresholds, the Nasdaq aims to maintain a higher standard of financial integrity and reduce the risk of market instability.

The requirement for new companies primarily operating in China to raise a minimum of 25 million dollars through public offerings is a notable change that could impact the ability of Chinese companies to access the U.S. capital markets. This higher threshold may make it more challenging for smaller Chinese companies to go public on the Nasdaq, as they may struggle to meet the new fundraising requirements. However, it could also attract more established and financially robust Chinese companies, potentially enhancing the overall quality of the listings on the exchange.

In 2024, the number of Chinese companies listing on the Nasdaq reached 52, setting a new historical high and surpassing the previous peak of 29 companies in 2019. This trend continued into the first half of 2025, with 40 Chinese companies successfully listing on U.S. markets, raising a total of 871 million dollars. Of these, 39 companies were listed on the Nasdaq. The majority of these companies were small to medium-sized enterprises, with most raising between 500 million dollars and 1500 million dollars. This indicates that the new listing standards could make it more difficult for some of these smaller companies to meet the requirements for listing on the Nasdaq.

These changes are part of a broader effort to prevent the controversial practice of "watered-down" listings, which has been a long-standing issue in the market. The Nasdaq has implemented what is considered the most stringent set of rule changes in two decades. In March, the U.S. Securities and Exchange Commission approved a significant revision to the "initial public offering liquidity requirements," which will take effect 30 days after approval. The core of the new rules is to upgrade the IPO threshold for all companies seeking to list in the U.S., requiring them to meet stricter non-restricted floating stock market value standards. Existing registered resale shares will no longer be included in the calculation of the market value of unrestricted publicly held shares. Companies will need to reassess their fundraising scale to ensure that the issuance of new shares is sufficient to meet the minimum market value standards. The Nasdaq stated in the rule amendment that "resale shares cannot create real liquidity like new share issuance." Additionally, the issuance threshold for companies transferring from the over-the-counter market has been raised, requiring companies to not only pass the valuation test but also ensure that their freely tradable shares have real market value at the time of listing, effectively eliminating speculative companies that rely on "book value."