Securities regulators approved strict new listing standards for reverse merger companies on Wednesday amid a rash of recent accounting scandals.

Under the new listing standards approved by the U.S. Securities and Exchange Commission, any company that becomes public through a reverse merger will have to meet stricter new requirements before they can list on NASDAQ OMX , NYSE Euronext and NYSE AMEX.

A reverse merger is a method of entering the market where U.S. shell companies merge with foreign companies. Many of the companies that have been targeted by regulators for accounting issues have been based in China.

Both the SEC and the U.S. Justice Department are actively investigating accounting irregularities at U.S.-listed companies based in China. The SEC sharpened its focus on the issue beginning last year as dozens of China-based companies began disclosing auditor resignations or book-keeping irregularities.

In addition to taking enforcement actions to suspend or halt trading in more than 35 companies in recent months, the exchanges and the SEC have also been working together to tackle the problem by crafting more stringent listing rules.

Placing heightened requirements on reverse merger companies before they can become listed on an exchange will provide greater protections for investors, SEC Chairman Mary Schapiro said in a statement.

Under the new rules, reverse merger companies will be prohibited from applying to list until they have completed a one-year seasoning period by trading in the over-the-counter market or on another regulated exchange.

They also must first file all of the necessary paperwork with the SEC, including audited financial statements, and they will need to maintain a minimum share price for a sustained time period.

That share price also must be sustained for at least 30 of the 60 trading days immediately prior to its listing application and the exchange's decision to list.

We believe the more rigorous standards for reverse mergers will benefit investors and issuers, and we applaud the SEC for its thoughtful attention and leadership on this important matter, NYSE Euronext said in a statement.

China