[Federal Register: March 22, 2007 (Volume 72, Number 55)]
[Notices]
[Page 13540-13542]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22mr07-104]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55479; File No. SR-Amex-2006-114]
Self-Regulatory Organizations; American Stock Exchange LLC;
Notice of Filing of a Proposed Rule Change and Amendment No. 1 Thereto
Clarifying the Continued Listing Standards for Units
March 15, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on December 4, 2006, the American Stock Exchange
LLC (``Amex'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared
substantially by Amex. On February 22, 2007, Amex filed Amendment No. 1
to the proposed rule change. The Commission is publishing this notice
to solicit comments on the proposed rule change, as amended, from
interested persons.
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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 Exchange proposes to (1) amend Section 1003(g) of the Amex
Company Guide to strengthen the procedures applicable to units when
their components fall below continued listing standards and clarify the
application of continued listing standards to individual components
comprising units once some (but not all) of the units have separated
into their component parts and (2) make minor, technical changes to
Sections 1003(a), (c), (d) and (f) of the Amex Company Guide. The text
of the proposal is available at Amex, at the Commission's Public
Reference Room, and on Amex's Web site at http://www.amex.com.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, Amex 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, and the most significant aspects of such statements are
set forth in Sections A, B, and C below.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Section 1003(g) of the Amex Company Guide currently provides that
the Exchange will ``normally consider'' suspending or delisting units
if any of their component parts do not meet the applicable continued
listing standards. However, if one or more of the components is
otherwise qualified for listing, such component may remain listed. For
example, a unit comprised of both a common stock component and a debt
component would face suspension or delisting procedures if either the
common stock or the debt component no longer met its applicable
continued listing standards. As a result, if the debt component failed
to meet the continued listing standards for bonds, both the unit and
such debt component would be subject to suspension or delisting
procedures, but the common stock component could independently remain
listed and continue to trade on the
[[Page 13541]]
Exchange, provided such common stock component met the continued
listing standards for equity securities.
The Exchange proposes to strengthen Section 1003(g) of the Amex
Company Guide so that in the event a component of a unit does not meet
its continued listing standards, the Exchange would no longer
``consider'' suspending or delisting the unit, but would commence a
formal, continued listing evaluation of such component and unit in
accordance with Section 1009 of the Amex Company Guide. Section 1009
sets forth the suspension and delisting procedures, timelines, and
requirements applicable to issuers identified as being below certain
continued listing standards. For example, an issuer of particular
securities that receives notification from the Exchange that it is
below the continued listing criteria for such securities must publicly
announce receipt of such notification and the policies and standards
upon which the determination is based.\3\
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\3\ See Section 1009(j) of the Amex Company Guide.
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The Exchange also proposes to add language to Section 1003(g) to
clarify the applicability of certain continued listing standards
relating to components of units that have separated. When units in good
standing begin to separate into their component securities, the
remaining units that are still intact and the components of those units
which have separated may all be separately listed and continue to
trade, provided that they meet the applicable continued listing
standards. The proposal specifies that, in determining whether a
particular component meets the continued listing distribution standards
set forth in Section 1003(b) of the Company Guide, the distribution
values for units that are intact and freely separable into their
component parts and for separately-traded components will be
aggregated. For example, if 120,000 shares of common stock are publicly
held after their separation from their units, and 210,000 intact and
freely separable units are publicly held, the common stock will be
credited with having 330,000 shares publicly held, enabling it to
satisfy one of the distribution standards for common stock, which
requires at least 200,000 shares of common stock to be publicly
held.\4\ If the units cease to exist or are no longer freely separable
and/or listed on the Exchange, the separately-traded components will
still be required to meet their applicable continued listing standards,
but the distribution values will not be aggregated.\5\
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\4\ See Section 1003(b)(i)(A) of the Amex Company Guide.
\5\ See proposed Section 1003(g) of the Amex Company Guide. The
Commission notes that under proposed Section 1003(g), if in the
above example the units are no longer freely separable into common
stock, there would be no aggregation of units with the common stock
for purposes of evaluating whether the units and comment stock meet
the continued listing standards.
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The Exchange will also consider suspending trading in, or removing
from listing, an individual component or unit if the distribution
values of such component or unit become so reduced as to make continued
listing inadvisable and despite the fact that the aggregated
distribution values satisfy the continued listing distribution
standards. In its review of the advisability of the continued listing
of an individual component or unit under such circumstances, the
Exchange proposes to take into account the trading characteristics of
the component or unit and whether it would be in the public interest
for trading in such component or unit to continue. The Exchange
believes that this proposal will enhance the transparency of its
continued listing standards.
The Exchange also proposes to make technical revisions to Sections
1003(a), (c), (d) and (f) in order to consistently use the term
``issuer'' as opposed to ``company.''
2. Statutory Basis
The proposed rule change is consistent with Section 6 of the
Act,\6\ in general, and furthers the objectives of Section 6(b)(5),\7\
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.
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\6\ 15 U.S.C. 78f.
\7\ 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 would
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange did not receive any written comments on the proposed
rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which Amex consents, the Commission will:
(A) By order approve such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be 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 (http://www.sec.gov/rules/sro.shtml.
); or Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-Amex-2006-114 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Amex-2006-114. This file
number should be included on the subject line if e-mail 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 Web site (http://www.sec.gov/rules/sro.shtml
). 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 in the Commission's Public Reference Room. Copies of the filing
also will be available for inspection and copying at the principal
office of the Exchange. All
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comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-Amex-2006-114 and should be
submitted on or before April 12, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-5205 Filed 3-21-07; 8:45 am]
BILLING CODE 8010-01-P