Nasdaq Rule Change Lets It Deny Listings of Small-Cap IPOs (1)

Nasdaq Inc. is changing its rules to allow it to turn down stock listings when it spots red flags, even if applicants meet all of the exchange operator’s requirements.

The effort is a bid to prevent wild market swings and allegations of stock manipulation that have plagued small initial public offering, many by companies based in Asia.

Under the plan, outlined in a filing with the US Securities and Exchange Commission Friday, Nasdaq could consider where the company is located, whether US investors have legal remedies in those jurisdictions, and if any of the company’s advisers — including auditors, underwriters, ...