In September 2025, Nasdaq proposed a series of amendments to its listing standards that could significantly reshape the landscape for cross-border and micro-cap IPOs—particularly those involving Asia-based companies. If approved by the SEC, these changes would raise capital thresholds, accelerate delistings, and materially alter how smaller international companies access U.S. public markets.

What Is Changing?

Nasdaq’s proposal introduces three material shifts:

First, the minimum public float requirement for companies listing under the net income standard would increase from $5 million to $15 million, applying globally. This is a meaningful change given that more than half of operating-company IPOs in 2025 raised less than $15 million.

Second, companies principally operating in China, including Hong Kong and Macau, would be required to raise at least $25 million in gross offering proceeds. While Nasdaq cites consistency with prior SEC rules applicable to “restrictive markets,” the practical impact is significant: only a small fraction of China-based issuers that went public in 2025 would have met this threshold.

Third, Nasdaq proposes to accelerate delisting for companies whose market value of listed securities falls below $5 million, moving them directly to OTC trading while any appeal is pending.

Why Does This Matter?

Cross-border IPOs—especially from Asia—have represented a substantial share of U.S. new listings in recent years. Many of these companies pursued smaller IPOs as an initial step, using modest capital raises to establish public-market visibility and position themselves for future growth.

The new rules raise the barrier materially for this cohort. For Asia-based issuers already navigating geopolitical tension, limited institutional participation, and valuation sensitivity, the higher thresholds may delay or derail traditional IPO plans.

Nasdaq’s Rationale

Nasdaq has framed the proposal as a measure to protect investors and safeguard market integrity, citing concerns about extreme volatility, insufficient price discovery, and potential market manipulation in very small-float IPOs.

Indeed, recent data shows wide dispersion in post-IPO performance among China-based listings—ranging from extraordinary gains to steep losses—suggesting that some offerings may not be well suited for public markets at their initial size. Nasdaq has also noted the disproportionate compliance burden associated with these listings, including heightened regulatory referrals and reputational risk.

Likely Market Consequences

While the rules remain subject to SEC approval, several outcomes are already foreseeable:

• A rush to market by issuers currently in registration, seeking to complete offerings under existing standards.

• Increased interest in NYSE  American, which maintains lower public-float requirements for profitable companies.

• Greater appeal of SPAC mergers, particularly for companies that  do not require immediate capital or can meet float requirements through existing non-affiliate shareholders.

• Corporate restructuring among Asia-based issuers, as companies reassess where they are “principally administered” and consider shifting operations, governance, or control to jurisdictions such as Singapore.

• A potential flight to quality, as higher offering thresholds may encourage greater institutional participation, improved liquidity, and more stable aftermarket performance—albeit at the cost of reduced access for smaller issuers.

• Strategic Implications for Asia-Based Companies

These proposed rules underscore a broader trend: U.S. capital markets are becoming more selective, not less global. For Asia-based companies, early planning around structure, scale, governance, and listing pathway has never been more critical.

Whether through a larger traditional IPO, a SPAC transaction, or alternative exchange strategies, issuers must carefully align their capital-markets approach with these evolving regulatory realities.