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Nasdaq Seeks Power to Block Suspect Listings
18 Dec
Summary
- SEC task force targets gatekeepers facilitating foreign stock violations.
- Jay Clayton warns of deepening winter for US capital markets.
- Nasdaq wants discretion to deny listings flagged with red flags.
US capital markets face scrutiny as enforcement activity decreases and deregulation trends persist, with warnings of a "darkest depths of winter" ahead.
Amid this environment, regulators are concentrating on combating the suspected manipulation of small-cap Chinese stocks. In September, the SEC established a dedicated task force to investigate "gatekeepers" accused of facilitating securities law violations linked to foreign companies, particularly from China.
Nasdaq is proposing rule changes to gain the authority to reject stock listings exhibiting "red flags," even if they meet existing criteria. This initiative aims to preemptively address concerns about stock manipulation and market volatility that have disproportionately affected smaller initial public offerings, many from Asia. However, critics argue Nasdaq already possesses sufficient discretionary power under existing rules to deny listings based on such suspicions.
