27602 Federal Register / Vol. 72, No. 94 / Wednesday, May 16, 2007 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 27753 

(March 1, 1990), 55 FR 8626 (March 8, 1990) (SR–

Amex–89–29) (approving the listing guidelines 

under Section 107 for new securities not otherwise 

covered under existing sections of the Company 

Guide). 

4The minimum public distribution requirement 

for Index-Linked Exchangeable Notes set forth in 

Section 107C of the Amex Company Guide is 

150,000 notes rather than one million trading units. 

Rule 15a–6 (17 CFR 240.15a–6) under 

the Securities Exchange Act of 1934 (15 

U.S.C. 78a et seq.) provides, among 

other things, an exemption from brokerdealer registration for foreign brokerdealers that effect trades with or for U.S. 

institutional investors through a U.S. 

registered broker-dealer, provided that 

the U.S. broker-dealer obtains certain 

information about, and consents to 

service of process from, the personnel of 

the foreign broker-dealer involved in 

such transactions, and maintains certain 

records in connection therewith. 

These requirements are intended to 

ensure (a) that the U.S. broker-dealer 

will receive notice of the identity of, 

and has reviewed the background of, 

foreign personnel who will contact U.S. 

institutional investors, (b) that the 

foreign broker-dealer and its personnel 

effectively may be served with process 

in the event enforcement action is 

necessary, and (c) that the Commission 

has ready access to information 

concerning these persons and their U.S. 

securities activities. 

It is estimated that approximately 

2,000 respondents will incur an average 

burden of three hours per year to 

comply with this rule, for a total burden 

of 6,000 hours. At an average cost per 

hour of approximately $100, the 

resultant total cost of compliance for the 

respondents is $600,000 per year (2,000 

entities × 3 hours/entity × $100/hour = 

$600,000). 

Written comments are invited on: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 

(b) the accuracy of the agency’s estimate 

of the burden of the proposed collection 

of information; (c) ways to enhance the 

quality, utility, and clarity of the 

information to be collected; and (d) 

ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology. 

Consideration will be given to 

comments and suggestions submitted in 

writing within 60 days of this 

publication. 

Direct your written comments to R. 

Corey Booth, Director/Chief Information 

Officer, Securities and Exchange 

Commission, C/O Shirley Martinson, 

6432 General Green Way, Alexandria, 

VA 22312 or send an e-mail to: 

PRA_Mailbox@sec.gov. Comments must 

be submitted to OMB within 60 days of 

this notice. 

Dated: May 10, 2007. 

J. Lynn Taylor, 

Assistant Secretary. 

[FR Doc. E7–9412 Filed 5–15–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55733; File No. SR–Amex–

2007–34] 

Self-Regulatory Organizations; 

American Stock Exchange LLC; Notice 

of Filing and Order Granting 

Accelerated Approval of Proposed 

Rule Change, as Modified by 

Amendment No. 1 Thereto, Relating to 

Amendments to Section 107 of the 

Company Guide 

May 10, 2007. 

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 April 5, 

2007, 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 and II 

below, which Items have been 

substantially prepared by the Exchange. 

On May 4, 2007, the Exchange filed 

Amendment No. 1 to the proposed rule 

change. This order provides notice of 

the proposed rule change, as modified 

by Amendment No. 1, and approves the 

proposed rule change, as amended, on 

an accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend: (1) 

Sections 107A(b) and 107D(a) of the 

Amex Company Guide to provide an 

exception to the minimum public 

distribution requirement of one million 

units for issuances traded in thousand 

dollar denominations, and (2) Sections 

107A(b), 107C(a) and 107D(a) of the 

Amex Company Guide to provide an 

exception to the 400 public shareholder 

requirement for securities that are 

redeemable at the option of the holders 

thereof on at least a weekly basis. The 

text of the proposed rule change is 

available at Amex, the Commission’s 

Public Reference Room, and 

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, 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 III below. The 

Exchange has prepared summaries, set 

forth in Sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Pursuant to Section 107 of the Amex 

Company Guide, the Exchange may 

approve for listing and trading securities 

which cannot be readily categorized 

under the listing criteria for common 

and preferred securities, bonds, 

debentures, or warrants (‘‘Section 107 

Securities’’).3 The general listing criteria 

relating to issuers and issuances are set 

forth in Section 107A of the Company 

Guide. In connection with each 

potential listing of Section 107 

Securities, the Exchange evaluates each 

security and issuance against the 

following criteria in Section 107A (and 

correspondingly in Sections 107B, 

107C,4 107D, and 107E): (1) A principal 

amount/aggregate market value of $4 

million or greater, and (2) a minimum 

public distribution requirement of one 

million trading units with a minimum 

of 400 public shareholders, except that, 

if traded in thousand dollar 

denominations, then no minimum 

number of holders. In addition, the 

listing criteria also requires that the 

issuer must have assets in excess of 

$100 million, stockholders’ equity of at 

least $10 million, and pre-tax income of 

at least $750,000 in the last fiscal year 

or in two of the three prior fiscal years. 

In the case of an issuer who is unable 

to satisfy the earnings criteria stated in 

Section 101 of the Company Guide, the 

Exchange will require the issuer to have 

the following: (a) Assets in excess of 

$200 million and stockholders’ equity of 


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Federal Register / Vol. 72, No. 94 / Wednesday, May 16, 2007 / Notices 27603 

5A revision to Section 107A(b) of the Amex 

Company Guide will also affect Sections 107B and 

107E relating to equity linked term notes and trust 

certificate securities, respectively, because these 

provisions refer to Section 107A for purposes of 

meeting the ‘‘General Criteria.’’

6See Securities Exchange Act Release No. 32343 

(May 20, 1993), 58 FR 30833 (May 27, 1993) (SR–

Amex–92–42) (approving the listing and trading of 

Equity Linked Term Notes). See also Securities 

Exchange Act Release No. 47055 (December 19, 

2002), 67 FR 79669 (December 30, 2002) (SR–

Amex–2002–110) (increasing the maximum number 

of equity securities permitted to be linked to an 

Equity Linked Term Note); Securities Exchange Act 

Release No. 42582 (March 27, 2000), 65 FR 17685 

(April 4, 2000) (SR–Amex–99–42) (revising Section 

107B of the Company Guide). 

7See Securities Exchange Act Release No. 51258 

(February 25, 2005), 70 FR 10700 (March 4, 2005) 

(SR–Amex–2005–001) (adopting generic listing 

standards for Index-Linked Securities). 

8See Securities Exchange Act Release No. 50355 

(September 13, 2004), 69 FR 56252 (September 20, 

2004) (SR–Amex–2004–23) (approving generic 

listing standards for Trust Certificate Securities). 

9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(5). 

at least $10 million; or (b) assets in 

excess of $100 million and stockholders’

equity of at least $20 million. 

Minimum Public Distribution 

The first part of the proposal codifies 

an exception to Sections 107A(b) and 

107D(a) of the Amex Company Guide so 

that certain issuances of Section 107 

Securities may be listed even though the 

minimum public distribution 

requirement of one million units is not 

met. This exception, however, is 

conditioned on whether or not the 

issuance is traded in thousand dollar 

denominations. Sections 107A (General 

Criteria) and 107D (Index-Linked 

Securities) currently require a minimum 

public distribution requirement of one 

million trading units and a minimum of 

400 public shareholders, except, if 

traded in thousand dollar 

denominations, then no minimum 

number of holders. Amex notes that, 

without the exception to the one million 

unit minimum public distribution 

requirement, the Exchange would be 

unable to list certain Section 107 

Securities in thousand dollar 

denominations having a market value of 

less than $1 billion. Amex believes the 

proposed exception to be a reasonable 

accommodation for those issuances in 

thousand dollar denominations. 

Accordingly, the proposal amends the 

rule text of Section 107A(b) and 107D(a) 

so that the minimum public distribution 

and minimum public shareholders 

requirements will not be applicable to 

an issue traded in thousand dollar 

denominations. 

Minimum Public Shareholders 

The purpose of the second part of the 

proposal is to provide an exception to 

Sections 107A(b), 107C(a), and 107D(a) 

of the Amex Company Guide so that 

Section 107 Securities may be listed 

even though there may be less than 400 

public shareholders at the time of 

listing.5 This exception will be 

conditioned on whether the particular 

issue provides for the redemption of 

securities at the option of the holders on 

at least a weekly basis. Therefore, the 

revision to Sections 107A(b), 107C(a), 

and 107D(a) will provide that the 

minimum public shareholders 

requirement will not apply if the 

securities are redeemable at the option 

of the holders thereof on at least a 

weekly basis. 

Over the past several years, the 

Exchange has added generic listing 

standards in Section 107 of the 

Company Guide for Equity Linked Term 

Notes, Index-Linked Exchangeable 

Notes, Index-Linked Securities, and 

Trust Certificate Securities. These 

requirements are set forth in Sections 

107B,6 107C, 107D,7 and 107E 8 of the 

Amex Company Guide, respectively. 

Currently, for each issuance of the 

foregoing Section 107 Securities, there 

must be a minimum of 400 public 

shareholders, except when the issue is 

traded in thousand dollar 

denominations. The Exchange submits 

that an additional exception to the 400 

holder requirement is appropriate for 

certain securities which provide for 

redemption at the option of the holders 

on at least a weekly basis. 

The Exchange believes that a weekly 

redemption right will ensure a strong 

correlation between the market price of 

Section 107 Securities and the 

performance of the underlying asset, 

such as a single security or basket of 

securities and/or securities index, as 

holders will be unlikely to sell their 

securities for less than their redemption 

value if they have a weekly right to 

redeem such securities for their full 

value. In addition, in the case of certain 

Section 107 Securities with a weekly 

redemption feature, the issuer may have 

the ability to issue new securities from 

time to time at market prices prevailing 

at the time of sale, at prices related to 

market prices, or at negotiated prices. 

The Exchange believes that this 

provides a ready supply of new 

securities, thereby reducing the 

potential that Section 107 Security 

market prices will be affected by a 

scarcity of available securities. In 

addition, the ability to issue new 

securities may assist in maintaining a 

strong correlation between the market 

price and indicative value, based largely 

on potential arbitrage opportunities that 

should mitigate the effect of price 

differentials. 

Amex believes that the ability to list 

certain Section 107 Securities with 

these characteristics without any 

specific requirements as to the number 

of holders is important to the successful 

listing of such securities. Issuers issuing 

these types of Section 107 Securities 

generally do not intend to do so by way 

of an underwritten offering, but instead, 

initially distribute the securities similar 

to the manner in which exchange-traded 

funds or ‘‘ETFs’’ are brought to market. 

In the case of an ETF, shares are initially 

launched or distributed without a 

significant distribution event, with the 

share float increasing over time as 

securities in creation unit size are 

issued from the issuer at net asset value. 

The Exchange states that, because of 

market dynamics and the purchasing 

behavior of investors, it is difficult for 

an issuer to be able to guarantee a 

sufficient number of public 

shareholders or investors on the date of 

listing in order to meet the 400 

shareholders requirement. However, the 

Exchange believes that this difficulty in 

ensuring 400 shareholders on the listing 

date is not indicative of a lack of 

liquidity and/or adequate distribution of 

the securities. Accordingly, the 

Exchange submits that the existence of 

a weekly redemption option justifies 

this limited exception to the 400 public 

shareholder requirement. 

2. Statutory Basis 

The proposal is consistent with 

Section 6(b) of the Act,9 in general, and 

Section 6(b)(5) of the Act,10 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, and to remove 

impediments to, and perfect the 

mechanism of a free and open market 

and a national market system. 

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 Act. 


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27604 Federal Register / Vol. 72, No. 94 / Wednesday, May 16, 2007 / Notices 

11 In approving this rule change, the Commission 

notes that it has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

12 15 U.S.C. 78f(b)(5). 

13See Securities Exchange Act Release No. 55687 

(May 1, 2007), 72 FR 25824 (May 7, 2007) (SR–

NYSE–2007–27). 

14 15 U.S.C. 78s(b)(2). 

15 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 55161 

(January 24, 2007), 72 FR 4754 (February 1, 2007) 

(SR–ISE–2006–62) (‘‘Penny Pilot Order’’). 

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 written comments on the 

proposed rule change. 

III. 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 rulecomments@sec.gov. Please include File 

Number SR–Amex–2007–34 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–2007–34. 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 such filing also will be 

available for inspection and copying at 

the principal offices of the Exchange. 

All 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–2007–34 and should 

be submitted on or before June 6, 2007. 

IV. Commission’s Findings and Order 

Granting Accelerated Approval of the 

Proposed Rule Change 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to a national 

securities exchange.11 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,12 which requires that 

an exchange have rules designed, among 

other things, 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. The Commission 

believes that this proposal should 

benefit investors by providing an 

exception to the minimum public 

distribution requirements for certain 

Section 107 Securities issued and traded 

in thousand dollar denominations and 

providing an exception to the 400 

public shareholder requirement for 

Section 107 Securities that are 

redeemable at the option of the holders 

thereof on at least a weekly basis. The 

Commission believes that these 

exceptions are reasonable and should 

allow for the listing and trading of 

certain Section 107 Securities that 

would otherwise not be able to be listed 

and traded on the Exchange. 

The Commission finds good cause for 

approving this proposal before the 

thirtieth day after the publication of 

notice thereof in the Federal Register. 

The Commission notes that it has 

previously approved minimum public 

distribution and minimum public 

shareholder requirements that are 

substantially similar to Amex’s proposal 

and found that such requirements were 

consistent with the Act.13 The 

Commission presently is not aware of 

any regulatory issue that should cause it 

to revisit that finding or would preclude 

the application of the proposed 

exceptions to the minimum public 

distribution and minimum public 

shareholder requirements. Therefore, 

accelerating approval of this proposal 

should benefit investors by creating, 

without undue delay, additional 

competition in the market for such 

securities. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,14 that the 

proposed rule change (SR–Amex–2007–

34), as modified by Amendment No.1, 

be, and it hereby is, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–9364 Filed 5–15–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55734; File No. SR–ISE–

2007–22] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing of Proposed Rule 

Change as Modified by Amendment 

No. 1 Thereto Relating to Split Prices 

May 10, 2007. 

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 March 26, 

2007, the International Securities 

Exchange, LLC (‘‘ISE’’ 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 substantially prepared by the 

ISE. On April 20, 2007, the Exchange 

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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The ISE proposes to amend its rule 

governing ‘‘Split Prices.’’ Specifically, 

the Exchange proposes to provide for 

executions in its Block, Facilitation and 

Solicitation Mechanisms at half-penny 

prices for certain options classes 

included in the penny pilot program.3

The text of the proposed rule change is 

available at ISE, the Commission’s 

Public Reference Room, and 

www.iseoptions.com. 


cprice-sewell on PROD1PC66 with NOTICES