In the News: Nasdaq Tightens Chinese Listings; China Tax Evasion; and US Closes Tariffs Loophole

August 21, 2024 | BY

Clarence Lee &Krista Lee

Nasdaq questioned the identities and backgrounds of Chinese IPO investors; China rolls out new phase of Golden Tax System; and U.S. Congress attempts to prevent Chinese companies from using de minimis loophole to avoid tariffs

Credit: Askar/Adobe Stock

Amid Nasdaq Restrictions Chinese IPOs Continue to List in the US

The U.S. Nasdaq Stock Market has "been asking in some deals for China issuers, for additional diligence around things like [the identities of the] selling stockholders," according to John Owen, a capital markets partner at Morrison Foerster in New York.

Additionally, Nasdaq requested documentation on buyers of Chinese IPO shares, so that the exchange could ensure that the majority of the investors were U.S. citizens, according to Nikkei Asia. Furthermore, due diligence requires that the principal underwriter must be a member of the Nasdaq, which comes with its own set of regulations.

The Nasdaq Stock Market is intensifying its scrutiny over small to midsize Chinese companies that are planning to list in the U.S. stock market, lengthening the listing process by weeks to even months, according to Nikkei Asia.

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