Nasdaq Granted New Power to Reject High-Risk IPOs
The SEC has approved a rule giving Nasdaq expanded authority to deny IPOs that show signs of potential manipulation or regulatory non-cooperation.
Nasdaq Gains Authority to Reject IPOs with Manipulation Risks
The U.S. SEC has approved a new rule giving Nasdaq greater discretion to reject IPO applications that show signs of potential market manipulation. The change takes effect immediately and targets companies whose business activities, management integrity, or external partners raise regulatory concerns.
Nasdaq can now refuse listings if a company’s location hinders U.S. regulatory review or if its underwriters, auditors, lawyers, or brokers have been involved in questionable transactions. The rule also addresses issues seen in small-cap IPOs, where many newly listed companies experienced sharp price declines shortly after launch. Over the past year, half of Nasdaq’s IPOs raised under $15 million, and most lost more than 35% within a year.
This update reflects a broader effort to improve market quality and reduce risks for public investors.
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Regulatory update for investor awareness.
Disclaimer: Not Financial Advice.
