Nasdaq plans to amend rules to retain the power to reject listing applications when risks are detected.

Nasdaq is modifying its rules to allow it to reject stock listing applications when it detects warning signals, even if the applicant meets all requirements. This move aims to prevent market volatility and stock manipulation charges, phenomena that are common in small IPOs, many of which are based in Asia. According to a plan outlined in documents submitted to the U.S. Securities and Exchange Commission on Friday, Nasdaq may consider factors such as the company's location, whether U.S. investors have legal recourse in the relevant jurisdiction, and whether the company's advisors have been involved in other securities-related issues or abnormal transactions. 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 reject listing applications based on trading patterns or considerations related to the company's advisors. Nasdaq stated in the documents, "If Nasdaq determines that the applicant's securities are more susceptible to manipulation based on comparable features or involving similar advisors, these proposed factors will make the situation more transparent."