The Nasdaq Stock Market LLC proposed new rules requiring additional criteria for companies primarily operating in regions where the Public Company Accounting Oversight Board (PCAOB) cannot inspect public accounting firms, referred to as "Restrictive Markets." These rules mandate that these companies meet minimum offering sizes or public float percentages to list on Nasdaq in connection with Initial Public Offerings (IPOs) or business combinations. The goal is to enhance investor protection by ensuring that enough shares are available to support stable trading and prevent fraudulent activities, particularly in markets with limited regulatory oversight. The proposed changes aim to ensure sufficient investor interest and market liquidity for companies from Restrictive Markets when listing on Nasdaq.
Simple Explanation
Nasdaq wants to make sure companies from places where important financial checks can't happen have to be bigger or have more shares available to be traded, so people won't get tricked and trading can go smoothly.