[Federal Register Volume 65, Number 120 (Wednesday, June 21, 2000)]
[Notices]
[Pages 38616-38617]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-15619]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42928; File No. SR-Amex-99-30]


Self-Regulatory Organizations; American Stock Exchange LLC; Order 
Approving Proposed Rule Change and Amendments Nos. 1 and 2 Thereto 
Amending Exchange Rule 18; Withdrawal From Listing

June 13, 2000.

I. Introduction

    On August 13, 1999, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') submitted to the Securities and Exchange Commission 
(``SEC'' or ``Commission'') pursuant to section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to rescind Exchange Rule 18. On 
September 28, 1999, the Amex submitted Amendment No. 1 to the proposed 
rule change.\3\ On February 3, 2000, the Amex submitted Amendment No. 2 
to the proposed rule change.\4\ The proposed rule change, as amended by 
Amendments Nos. 1 and 2, was published for comment in the Federal 
Register on February 23, 2000.\5\ The Commission did not receive any 
comment letters with respect to the proposal. This order approves the 
Exchange's proposal, as amended.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Letter to Michael Walinskas, Deputy Associate Director, 
Division of Market Regulation (``Division''), Commission, from 
Michael J. Ryan, Chief of Staff, Amex, dated September 24, 1999 
(``Amendment No. 1''). In Amendment No. 1, Amex proposes to amend 
Exchange Rule 18 instead of rescinding the rule in its entirety, as 
proposed in its initial filing, to provide that an issuer may 
voluntarily withdraw a security from listing on the Exchange upon 
written notice to the Exchange.
    \4\ See Letter to Marla Chidsey, Attorney, Division, Commission, 
from Ivonne Lugo, Associate General Counsel, Amex, dated February 2, 
2000 (``Amendment No. 2''). In Amendment No. 2, Amex proposes to 
require the issuer to comply with all applicable state laws in 
effect in the state in which it is incorporated prior to filing to 
delist from the Amex. Amendment No. 2 also proposes to make 
conforming amendments to the Amex Company Guide Sections 1010 and 
1011.
    \5\ Securities Exchange Act Release No. 42427 (February 15, 
2000), 65 FR 9024.
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II. Description of the Proposal

    Amex Rule 18 currently requires an issuer, prior to withdrawing a 
security from listing on the Exchange, to file with the Exchange a 
certified copy of a resolution adopted by the board of directors 
authorizing withdrawal from listing and registration and explaining the 
reasons for such withdrawal. The Amex rule also provides that the 
Exchange may require the issuer to send to all registered holders of 
such security a statement of the reasons for such application, together 
with facts in support thereof within at least fifteen days prior to the 
filing of a delisting application with the Commission.\6\ These 
Exchange Rule 18 requirements must be met before an application for 
delisting can be filed with the Commission.
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    \6\ See 15 U.S.C. 781(d) and 17 CFR 240.12d2-2 describing how an 
issuer may delist from a national securities exchange.
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    According to the Amex, Exchange Rule 18 has not been applied in 
many years with respect to issuers seeking to voluntarily withdraw 
their securities from the listing on the Exchange. The Exchange 
believes Amex Rule 18 represents a needless restriction imposing 
burdensome delays on an issuer's decision to delist. The Amex stated 
that the proposed amendment to Exchange Rule 18 will implement its 
decision to eliminate obstacles and delays for issuers seeking to 
voluntarily withdraw their common stock from listing on the Exchange. 
Under the proposed amendments to Amex Rule 18, an issuer will be able 
to voluntarily withdraw a security from listing on the Exchange upon 
written notice to the Exchange, provided the issuer complies with all 
applicable state laws in effect in the state in which it is 
incorporated.\7\
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    \7\ The rule further states that the requirement of written 
notice that must be met before an application for delisting can be 
filed with the Commission.
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III. Discussion

    The Commission finds that the proposed rule change, as amended, is 
consistent with the requirements of Section 6 of the Act \8\ and the 
rules and regulations thereunder applicable to a national securities 
exchange.\9\ In particular, the Commission finds the proposed rule 
change is consistent with Section 6(b)(5) of the Act \10\ and which 
requires, among other things, that the rules of an exchange be designed 
to prevent fraudulent and manipulative acts and practices, to promote 
impediments to and perfect the mechanism of a free and open market, and 
to protect investors and the public interest.
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    \8\ 15 U.S.C. 78f.
    \9\ In approving this rule, the Commission has considered the 
proposed rule's impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
    \10\ 15 U.S.C. 78f(b)(5).
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    Over the last several years, Commission staff has express concerns 
regarding the potentially anti-competitive effects of certain rules 
adopted by self-regulatory organizations (``SROs''), such as Amex Rule 
18.\11\ The Commission encouraged the Amex to revise the standards a 
company must comply with prior to voluntarily delisting its securities 
from the Amex.\12\ The Commission believes that the exchanges should 
provide a listed company with a reasonable opportunity to move to 
another market if it so desires, thereby increasing competition among 
the markets. For example, on July 21, 1999, the Commission approved a 
proposed rule change to revise New York Stock Exchange's (``NYSE'') 
Rule 500 to simplify the procedures a NYSE-listed company must follow 
to voluntarily delist its securities from the NYSE.\13\ The Commission 
believes that the proposed amendments to Amex Rule 18 should similarly 
eliminate obstacles and delays for issuers seeking to delist their 
securities voluntarily from the Amex.
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    \11\ See Market 2000 Report: An Examination of Current Equity 
Market Developments, Division, Commission, January, 1994, at 30.
    \12\ Id. at 31.
    \13\ Securities Exchange Act Release No. 41634, 64 FR 40633 
(July 27, 1999).
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    Furthermore, the voluntary delisting procedures proposed by the 
Amex in the amended proposal represent a significant and positive 
change over the current delisting process and requirements in the 
Amex's rules. Specifically, the Commission believes that the proposed 
requirement that a listed company simply submit written

[[Page 38617]]

notice to the Amex that it wants to delist provided that it has 
followed all applicable state laws in effect in the state in which it 
is incorporated should ensure compliance with investor protections 
codified in relevant state statutes while still significantly 
streamlining the delisting process on the Amex.\14\ As a result, 
because the proposed amendments to Amex Rule 18 ease the existing 
restrictions on Amex-listed companies that wish to voluntarily delist 
their securities from the Exchange while continuing to ensure 
compliance with applicable state laws, the Commission believes that the 
Amex's proposed revisions to Amex Rule 18, as amended, are consistent 
with the requirements of Section 6(b)(5) of the Act \15\ that requires 
the rules of the Exchange to further the protection of investors and 
public interest.
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    \14\ As discussed above, the revision of Amex Rule 18 eliminates 
requirements for Amex issuers that were imposed by Amex Rule 18. 
Issuers wanting to voluntarily delist would still be required to 
comply with Section 12 of the Act, which provides notice and an 
opportunity for public comment. See supra note 6.
    \15\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\16\ that the proposed rule change (SR-Amex-99-30), including 
amendments Nos. 1 and 2, is approved.
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    \16\ 15 U.S.C. 78s(b)(2).

    By the Commission, for the Division of Market Regulation, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-15619 Filed 6-20-00; 8:45 am]
BILLING CODE 8010-01-M