# Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Provide Nasdaq With Limited Discretion To Deny Initial Listing to Certain Companies
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), [^1] and Rule 19b-4 thereunder, [^2] notice is hereby given that on December 12, 2025, The Nasdaq Stock Market LLC (“Nasdaq” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.
[^1] 15 U.S.C. 78s(b)(1).
[^2] 17 CFR 240.19b-4.
**I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change**
The Exchange proposes to provide Nasdaq with limited discretion to deny initial listing to companies, even where the applicant meets all stated listing requirements.
The text of the proposed rule change is available on the Exchange's website at *https://listingcenter.nasdaq.com/rulebook/nasdaq/rulefilings,* and at the principal office of the Exchange.
**II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change**
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
**A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change**
**1. Purpose**
Recently, Nasdaq has observed problematic or unusual trading in certain listed companies. Further, the Commission has imposed temporary trading suspensions pursuant to Section 12(k) of the Act on several listed securities based, generally, on concerns about potential manipulation in the securities effectuated through recommendations made to investors by unknown persons via social media to purchase, hold, and/or sell the securities. The Commission stated its belief that these recommendations appear to be designed to artificially inflate the price and volume of the securities and that the public interest and the protection of investors require a suspension of trading in the securities. [^3] In most cases, the affected securities were listed for less than one year.
[^3]*See, e.g.,* Securities Exchange Act Releases 34-104112 (September 26, 2025) (Smart Digital Group, Limited), 34-104113 (September 26, 2025) (QMMM Holding Limited), 34-104163 (October 3, 2025) (Etoiles Capital Group Co., Ltd.), 34-104164 (October 3, 2025) (Platinum Analytics Cayman Limited), 34-104165 (October 3, 2025) (Pitanium Limited), 34-104166 (October 8, 2025) (Empro Group Inc.), 34-104167 (October 8, 2025) (NusaTrip Incorporated), 34-104168 (October 16, 2025) (Premium Catering (Holdings) Limited), 34-104169 (October 22, 2025) (Robot Consulting Co., Ltd.), 34-104176 (November 11, 2025) (Charming Medical Limited), 34-104180 (November 14, 2025) (MaxsMaking Inc.), 34-104317 (December 4, 2025) (Robot Consulting Co., Ltd.) (collectively, the “Commission Suspension Orders”).
The Commission Suspension Orders generally appear to be based on activities of third parties, and there are no specific allegations in the Commission Suspension Orders against the companies, or persons associated with the companies, as being involved in the potentially manipulative trading activity. Nasdaq's listing requirements, which these companies satisfied both at the time of listing and on an ongoing basis, are based on the characteristics of the company itself and the securities it seeks to list. Likewise, Nasdaq Rule 5101, in conjunction with IM-5101-1, provides some discretion to deny listing where the company itself has engaged in misconduct or where an individual with a history of regulatory misconduct is associated with the company. [^4] Nasdaq Rule 5101 does not allow denial of a listing based on the potential for one or more unaffiliated third parties to engage in misconduct impacting a company's securities. [^5] The Commission is obliged to set aside a decision to deny listing that does not comport with Nasdaq rules. [^6] Therefore, Nasdaq requires additional authority to exercise discretion to deny a listing based on the potential for one or more third parties to engage in misconduct impacting a company's securities. Similarly, Nasdaq rules do not presently allow it to deny listing to a company based on its review of trading patterns of other companies with similar characteristics or based on considerations related to the company's advisors, and it requires additional authority to exercise discretion to do so. [^7]
[^4]*See* Listing Rule IM-5101-1. In approving the predecessor to Rule 5101, the Commission stated that it believed the rule change provided “greater assurance [to existing or prospective investors] that the risk associated with investing in Nasdaq is market risk rather than the risk that the promoter or other persons exercising substantial influence over the company is acting in an illegal manner.” Exchange Act Release No. 34151 (June 3, 1994), 59 FR 29843 (June 9, 1994) at 29845; *id.* at 29844, citing as the reason for the proposed rule concerns about “an increase in recent years in the number of applications for inclusion in Nasdaq by issuers that are managed, controlled or influenced by persons with a history of significant securities or commodities violations.”
[^5]*See id.* at 29845 (noting concerns raised during the comment process that “discretion accorded the NASD was unlimited and could lead the NASD to exclude an issuer from Nasdaq on a basis wholly unrelated to the legitimate concerns of administering Nasdaq.”)
[^6] 15 U.S.C. 78s(f).
[^7]*Cf.* Section 104.00 of the NYSE Listed Company Manual and Section 201 of NYSE American Company Guide requiring that companies go through a pre-review process before they are permitted to apply for listing.
Nasdaq is concerned about the allegedly manipulative trading taking place in listed securities and that pending applicants, despite meeting all listing requirements, have characteristics similar to those subject to the Commission's trading suspensions and therefore may be susceptible to similar manipulation. While Nasdaq proposed certain changes to the listing requirements in September 2025, [^8] those changes remain pending [^9] and Nasdaq believes that additional rules would help to address the concerns identified in the Commission Suspension Orders. For example, Nasdaq may identify similarities between companies seeking initial listing and the advisors to the companies that are the subject of the Commission Suspension Orders (including auditors, underwriters, law firms, brokers, clearing firms, or other professional service providers). For another example, Nasdaq may consider the impact of foreign laws on the potential recourse available to U.S. regulators or investors in the event of misconduct. Accordingly, Nasdaq proposes to adopt a new rule, IM-5101-3, providing Nasdaq with authority under Rule 5101 to deny initial listing based on factors that could make the listed security susceptible to manipulation related to concerns Nasdaq and other regulators have identified with previously listed companies that are similarly situated to the company or based on considerations related to the company's advisors (including auditors, underwriters, law firms, brokers, clearing firms, or other professional service providers), even where the applicant meets all stated listing requirements.
[^8] Exchange Act Release No. 103982 (September 16, 2025), 90 FR 45280 (September 19, 2025) (SR-Nasdaq-2025-068); Exchange Act Release No. 103979 (September 16, 2025), 90 FR 45298 (September 19, 2025) (SR-Nasdaq-2025-069).
[^9] Exchange Act Release No. 104058 (September 25, 2025), 90FR 46973 (September 30, 2025) (designating December 18, 2025, as the date the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, SR-Nasdaq-2025-069).
The proposed rule change includes a series of non-exclusive factors that Nasdaq will consider in determining whether to apply this discretion. These factors include the following:
• where the company is located, including the availability of legal remedies to U.S. shareholders in that jurisdiction, the existence of blocking statutes, data privacy laws and other laws in foreign jurisdictions that may present challenges to regulators seeking to enforce rules against the company, the ability of parties to conduct comprehensive due diligence in that jurisdiction, and the transparency of regulators in the jurisdiction;
• whether a person or entity exercises substantial influence over the company [^10] and, if so, where that person or entity is located, including the availability of legal remedies to U.S. shareholders in that jurisdiction, the existence of blocking statutes, data privacy laws and other laws in foreign jurisdictions that may present challenges to regulators seeking to enforce rules against the person or entity, the ability of parties to conduct comprehensive due diligence in that jurisdiction, and the transparency of regulators in the jurisdiction;
[^10] Nasdaq believes it is important to consider the location of a person or entity that exercises substantial influence over the company to ensure that such individuals and entities are accountable to shareholders and regulators, as appropriate.
• whether the expected public float and dissemination of the share distribution, based on a review of underwriter, broker and clearing allocations and consideration of prior deals involving those service providers, at the time of the IPO and post offering, raises concerns about adequate liquidity and potential concentration;
• whether there are issues concerning the company's advisors (including auditors, underwriters, law firms, brokers, clearing firms, or other professional service providers), based on factors including, but not limited to, whether the advisor has been reviewed by applicable regulators and, if so, what were the results of those reviews;
○ if the company's advisor is a new entity, whether the advisor's principals were involved with other firms with a regulatory history;
• whether any of the company's advisors were involved in prior transactions where the securities became subject to a pattern of concerning or volatile trading;
• whether the company's management and Board has experience or familiarity with U.S. public company requirements, including regulatory and reporting requirements under Nasdaq rules and federal securities laws;
• whether there are any FINRA, SEC or other regulatory referrals related to the company or its advisors, which can be included in the record of the matter and, if applicable, the results of those referrals;
• whether the company currently has, or recently has had, a going concern audit opinion and, if so, what is the Company's plan to continue as a going concern; and
• whether there are other factors that raise concerns about the integrity of the Company's board, management, significant shareholders, or advisors.
By giving Nasdaq the authority to exercise discretion in this manner, Nasdaq believes it can better address situations where a company satisfies Nasdaq's listing requirements, but has characteristics similar to other companies' securities where trading problems were observed and could make the company susceptible to manipulation. While Nasdaq may not otherwise have access to the facts underlying problematic or unusual trading that takes place across multiple U.S. exchanges as well as off-exchange, the factors will help identify situations where similar characteristics exist that are likely to create conditions that could allow problematic or unusual trading to also occur in the applicant's securities. Moreover, the proposed rule change will also give Nasdaq the authority to consider the involvement of advisors to the company and gatekeepers in other transactions that had problematic or unusual trading, and to take action to deny initial listing to a company involved with these entities.
When Nasdaq uses its authority to exercise discretion to deny listing, Nasdaq Staff will issue a written determination describing the basis for its decision. A Company must, within four business days from the date of Staff's written determination, make a public announcement in a press release or other Regulation FD compliant manner about the receipt of the determination and the Rule(s) upon which the determination is based, describing each specific basis and concern identified by Nasdaq in reaching its determination. [^11] The Company may within seven calendar days of when its application is denied seek review by a Hearings Panel, as set forth in Rule 5815.
[^11] Rule 5815(i)(2).
This proposed rule change is immediately effective, and Nasdaq proposes to apply the proposed rule to all companies currently in the application process.
**2. Statutory Basis**
The Exchange believes that its proposal is consistent with Section 6(b) of the Act, [^12] in general, and furthers the objectives of Section 6(b)(5) of the Act, [^13] in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest. Further, the Exchange believes that this proposal is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers.
[^12] 15 U.S.C. 78f(b).
[^13] 15 U.S.C. 78f(b)(5).
The Commission has previously opined on the importance of meaningful listing standards for the protection of investors and the public interest. [^14] In particular, the Commission has stated:
[^14] Securities Exchange Act Release No. 102622 (March 12, 2025), 90 FR 12608 (March 18, 2025) (approving SR-Nasdaq-2024-084 adopting initial listing liquidity requirements for companies applying to list or uplist on the Nasdaq Global Market or Nasdaq Capital Market).
The development and enforcement of meaningful listing standards for an exchange is of critical importance to financial markets and the investing public. Among other things, such listing standards help ensure that exchange-listed companies will have sufficient public float, investor base, and trading interest to provide the depth and liquidity to promote fair and orderly markets. [^15]
[^15]*Id.* at 12609.
Nasdaq believes that granting limited additional discretion to deny initial listing to companies, even when an applicant meets all stated listing requirements, is consistent with the requirements in Section 6(b)(5) of the Exchange Act. As noted, Nasdaq has observed trading patterns in certain securities—such as price swings unrelated to company news—and the Commission has issued multiple suspension orders alleging market manipulation in similar circumstances. The proposed factors will help provide transparency to situations where Nasdaq believes an applicant's securities may be more susceptible to manipulation, based on comparable characteristics or the involvement of similar advisors. Accordingly, Nasdaq believes that adopting this additional authority is consistent with the requirements to protect investors and the public interest. Further, while Nasdaq's use of this discretion may prevent some companies that otherwise meet the stated listing requirements from listing, such distinction between companies is not unfair because the affected companies will exhibit traits that increase their susceptibility to manipulation or share advisors with companies that previously demonstrated problematic or unusual trading patterns. Therefore the proposed rule change is consistent with Section 6(b)(5).
Nasdaq also believes that any impact on competition among companies as a result of the proposed rule change is necessary in furtherance of the investor protection goals of the Act.
**B. Self-Regulatory Organization's Statement on Burden on Competition**
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change will not impose any burden on competition among exchanges, since other exchanges either already have, or are able to adopt, similar rules providing them with discretion to deny initial listing. The proposed rule change may impose a burden on companies that are denied listing, but this burden is necessary to protect investors and the public interest, which is a primary purpose of the Act.
**C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others**
No written comments were either solicited or received.
**III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action**
Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act [^16] and Rule 19b-4(f)(6) [^17] thereunder.
[^16] 15 U.S.C. 78s(b)(3)(A)(iii).
[^17] 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement.
A proposed rule change filed under Rule 19b-4(f)(6) [^18] normally does not become operative prior to 30 days after the date of filing. However, pursuant to Rule 19b-4(f)(6)(iii), [^19] the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange asked that the Commission waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange states that waiver of the 30-day operative delay will immediately provide the Exchange with additional authority to exercise discretion to deny initial listing based on factors that could make the listed security susceptible to manipulation. The Exchange further states that applying this authority to any companies that may otherwise seek to list during the 30-day period could potentially minimize subsequent manipulative trading in those companies' securities. For these reasons, the Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposal operative upon filing. [^20]
[^18] 17 CFR 240.19b-4(f)(6).
[^19] 17 CFR 240.19b-4(f)(6)(iii).
[^20] For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f).
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
**IV. Solicitation of Comments**
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
**Electronic Comments**
• Use the Commission's internet comment form ( *https://www.sec.gov/rules/sro.shtml* ); or
• Send an email to *[email protected].* Please include file number SR-NASDAQ-2025-104 on the subject line.
**Paper Comments**
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-NASDAQ-2025-104. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's internet website ( *https://www.sec.gov/rules/sro.shtml* ). Copies of the filing will be available for inspection and copying at the principal office of the Exchange. Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection. All submissions should refer to file number SR-NASDAQ-2025-104 and should be submitted on or before January 20, 2026.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. [^21]
[^21] 17 CFR 200.30-3(a)(12), (59).
Sherry R. Haywood,
Assistant Secretary.