[Federal Register: December 24, 2002 (Volume 67, Number 247)]
[Notices]
[Page 78529-78531]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24de02-137]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-47007; File No. SR-Amex-2002-103]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the American Stock Exchange
LLC Relating to Minimum Size of Listing Qualifications Panels
December 16, 2002.
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 10, 2002, the American Stock Exchange LLC (``Amex'' 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Amex proposes to amend Section 1204 (a) of the Amex Company
Guide to provide that listing and delisting hearings may be conducted
before a Listing Qualifications Panel comprised of a minimum of two
rather than three members of the Amex Committee on Securities. Proposed
new language is italicized; proposed deletions are in [brackets].
* * * * *
Section 1204. The Listing Qualifications Panel
(a) All hearings will be conducted before a Listing Qualifications
Panel (``Panel'') comprised of at least [three] two members of the
Committee on Securities. No person shall serve as a Panel member for a
matter if his or her interest or the interests of any person in whom he
or she is directly or indirectly interested will be substantially
affected by the outcome of the matter. In the event of a tie vote among
the panel members, the matter will be forwarded to the full Committee
on Securities for review pursuant to Section 1205.
* * * * *
(b) Not applicable.
(c) Not applicable.
* * * * *
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.
[[Page 78530]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
In May 2002, the Exchange implemented significant changes to the
appeal process applicable to the review of initial and continued
listing determinations.\3\ The revised procedures, which are contained
in Part 12 of the Amex Company Guide, provide issuers with the right to
appeal a staff determination to a Listing Qualifications Panel
(``Panel'') comprised of at least three members of the Amex Committee
on Securities (the ``Committee''). The issuer also has the right to
appeal an adverse Panel decision to the full Committee.
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\3\ See Securities Exchange Act Release No. 45898, (May 8,
2002), 67 GT 34502 (May 14, 2002) (approving File No. SR-Amex-2001-
47).
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The new procedures have operated relatively smoothly, and provided
increased transparency and efficiency to the process. However, the Amex
believes that the requirement that each Panel be comprised of at least
three-members of the Committee is potentially problematic, in that on
occasion last-minute scheduling conflicts have developed for Panel
members who had agreed to participate on a particular hearing date.
Although in each case that has arisen so far, the Panel member was
ultimately able to participate, the Exchange is concerned that
unanticipated conflicts or illness could potentially force the
rescheduling of a hearing date under circumstances that could be
disruptive to issuers and to the appeal process. While the Exchange's
hearings staff does contact additional Committee members to serve as
``alternates,'' typically these members are released from this
obligation two or three days prior to the hearing date in order to
avoid the burden on such members of reviewing the written materials if
their services will not be needed. The Amex believes it is also not
optimal to increase the size of Panels to more than three members, in
that larger Panel sizes would result in appeals to the full Committee
being decreasingly meaningful.
Accordingly, the Exchange is proposing that the minimum Panel size
be reduced from three members of the Committee to two. Because the Amex
continues to believe that a three-member Panel size is optimal--in
order to avoid a ``tie'' vote and to provide a broader range of views--
the Exchange's hearings staff will continue to schedule three Committee
members for each hearing date. Prior to holding a hearing with only two
Panel members, the hearings staff will consult with the two members,
and if such Panel members feel that the particular facts and
circumstances of the appeal in question are such that a two-member
Panel is not appropriate, then the hearings staff will postpone the
hearing to a later date.
While the Amex anticipates that two-member Panels will be used
infrequently (if ever), the reduction in the minimum Panel size will
permit hearings to be held in the event of a last-minute scheduling
conflict or illness. In the event that a two-member Panel was unable to
agree on a decision, the matter would be forwarded to the full
Committee for review. The Amex contends that Nasdaq listing
qualifications panels consist of only two panel members and their
process appears to operate relatively smoothly.\4\
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\4\ See NASD Rule 4830(a).
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2. Statutory Basis
The Exchange believes that the proposal is consistent with Section
6(b) of the Act \5\ in general and furthers the objectives of Section
6(b)(5)\6\ in particular in that it is designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, to protect investors and the public interest
and is not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
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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 that is not necessary or appropriate
in furtherance of the purposes of the Exchange Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange has neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \7\ and Rule 19b-4(f)(6)\8\ thereunder because
the proposal: (i) Does not significantly affect the protection of
investors or the public interest; (ii) does not impose any significant
burden on competition; and (iii) does not become operative prior to 30
days after the date of filing or such shorter time as the Commission
may designate if consistent with the protection of investors and the
public interest. In addition, the Exchange provided the Commission with
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 the filing the proposed rule
change as required by Rule 19b-4(f)(6). At any time within 60 days of
the filing of such proposed rule change, the Commission may summarily
abrogate 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.
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6).
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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. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for inspection and copying at the
Commission's Public Reference Room. Copies of such filing will also be
available for inspection and copying at the principal office of the
Exchange. All submissions should refer to File No. SR-Amex-2002-103 and
should be submitted by January 14, 2003.
[[Page 78531]]
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-32313 Filed 12-23-02; 8:45 am]
BILLING CODE 8010-01-P