Nasdaq Granted Greater Discretion to Reject High-Risk IPOs
Jinse Finance reported that the Nasdaq exchange has been granted greater discretion to reject IPO applications that pose manipulation risks. This new regulation was immediately approved and enacted by the U.S. Securities and Exchange Commission (SEC) on Friday. The new rules authorize Nasdaq to refuse company listings under the following circumstances: if the company's place of business does not cooperate with U.S. regulatory reviews; if underwriters, brokers, lawyers, or auditing firms have been involved in problematic transactions; or if there are doubts about the integrity of management or major shareholders. This move aims to address the issue of significant price drops following the listing of numerous small IPOs in recent years. Over the past year, half of Nasdaq's IPOs raised less than $15 million, with the majority of these stocks falling by more than 35% within a year.
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