THE nasdaq (National Association of Securities Dealers Automated Quotations) Stock Market has increased its scrutiny of small to midsize Chinese companies looking to list.
This has caused uncertainty and delays, according to people familiar with the matter, reports Nikkei Asia. Several investment bankers, lawyers and professional services companies have said the tech-focused Nasdaq has questioned the identity and background of investors before the companies' planned initial public offerings, a move that has extended the listing process by weeks or months.
The stricter screening is aimed at protecting investors from potentially excessive volatility caused by the listings, according to sources. America's No 2 stock exchange has asked the Chinese companies for documentation on buyers of IPO shares to ensure that the majority are US citizens, one lawyer said.
Additional due diligence includes requiring the principal underwriter to be a member of the Nasdaq, which has its own set of regulations.
Another lawyer, who spoke on condition of anonymity, pointed out that 80 per cent of IPO buyers for Chinese companies allowed to list at Nasdaq were US citizens. The recent concerns stem from so-called pump and dump transactions by foreign investors in small to midsize Chinese listings that have brought volatility to the market, industry players say.
SeaNews Turkey
This has caused uncertainty and delays, according to people familiar with the matter, reports Nikkei Asia. Several investment bankers, lawyers and professional services companies have said the tech-focused Nasdaq has questioned the identity and background of investors before the companies' planned initial public offerings, a move that has extended the listing process by weeks or months.
The stricter screening is aimed at protecting investors from potentially excessive volatility caused by the listings, according to sources. America's No 2 stock exchange has asked the Chinese companies for documentation on buyers of IPO shares to ensure that the majority are US citizens, one lawyer said.
Additional due diligence includes requiring the principal underwriter to be a member of the Nasdaq, which has its own set of regulations.
Another lawyer, who spoke on condition of anonymity, pointed out that 80 per cent of IPO buyers for Chinese companies allowed to list at Nasdaq were US citizens. The recent concerns stem from so-called pump and dump transactions by foreign investors in small to midsize Chinese listings that have brought volatility to the market, industry players say.
SeaNews Turkey
