The US Securities and Exchange Commission approved rules making it more difficult for companies to complete reverse mergers, a tactic used by many small Chinese companies in which a private entity goes public by buying a listed shell company, the Financial Times reported. Before uplisting to an exchange, reverse mergers will first be required to trade in over-the-counter markets for one year and, during that time, submit financial statements as a listed company would. The company would also be required to maintain a minimum closing share price of US$4 for 30 of the 60 days prior to applying to list on an exchange. More than 200 companies with operations in China have listed in the US, the majority through reverse mergers. The SEC ruling comes after short sellers raised concerns earlier this year that Chinese companies were using the structure to avoid the oversight normally associated with going public. Thus far, Nasdaq and NYSE have delisted five Chinese companies and suspended the trading of 35 others.