CFO Slice

Nasdaq has said it will tighten listing rules and trading standards for small stocks as it seeks to combat a spate of suspected “pump and dump” scams involving Chinese companies listed in the U.S. The exchange is to usher in an "accelerated process" for suspending and delisting small stocks that fail to meet its standards. Minimum float requirements will be modified “specifically for companies principally operating in China”. While Nasdaq’s exchange is home to some of the world’s biggest companies, such as Apple and Amazon, it also draws numerous IPOs from tiny companies. Brokers and trading firms say Nasdaq’s minimum listing standards are too lax, enabling the listing of dubious companies, particularly from foreign jurisdictions. John Zecca, Nasdaq’s global chief legal, risk and regulatory officer, said the exchange had been monitoring “the extreme volatility and potential trading market manipulation that has been observed within our US markets, especially with respect to smaller companies that are principally operating in China”.