Document ID: SEC-2006-0150-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2006-02-08T05:00Z

[Federal Register: February 8, 2006 (Volume 71, Number 26)]
[Notices]
[Page 6528-6530]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08fe06-152]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53205; File No. SR-Amex-2005-124]

Self-Regulatory Organizations; American Stock Exchange LLC;
Notice of Filing of Proposed Rule Change and Amendments No. 1, 2, and 3
Thereto Relating to Increases in the Original Listing and Annual Fees

February 1, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 6, 2005, 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 by Amex. On December 28,
2005, Amex filed Amendment No. 1 to the proposed rule change.\3\ On
January 23, 2006, Amex filed Amendment No. 2 to the proposed rule
change.\4\ On January 27, 2006, Amex filed Amendment No. 3 to the
proposed rule change.\5\ 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.
    \3\ Amendment No. 1 explains the differences in the percentage
increases in the original listing and annual fees for smaller and
larger companies and also makes technical corrections to the rule
text in Exhibit 5.
    \4\ Amendment No. 2 was withdrawn on January 31, 2006.
    \5\ Amendment No. 3 discusses the reasons why the original
listing and annual issuer fees vary depending on the size of the
company and corrects non-substantive typographical errors in the
text of the Amex Fee Schedule submitted as Exhibit 5.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Amex proposes to amend Sections 140 and 141 of the Amex Company
Guide and the Amex Fee Schedule to increase the original listing and
the annual issuer fees. The text of the proposed rule change is
available on Amex's Web site (http://www.amex.com), at the principal

office of Amex, and at the Commission's Public Reference Room.

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

[[Page 6529]]

proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. Amex 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
    Amex proposes to amend Sections 140 and 141 of the Amex Company
Guide and the Amex Fee Schedule to increase the original listing and
the annual issuer fees. The Exchange believes these fee increases are
necessary to cover increased costs it has incurred in the enhancement
and development of its trading technology and improvements in the
overall level of services provided to its members and listed companies.
The Exchange's original and annual listing fees have not increased
since 2002. Should the Commission approve the proposed rule change, the
Exchange proposes to implement the increased annual fees retroactively
to January 2006 and the increased original listing fees prospectively
upon the Commission's approval of this proposal.\6\
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    \6\ Amex clarified that the annual fees will be applied
retroactively to January 2006 and the original listing fees will be
applied prospectively. Telephone conversation between Claire
McGrath, Senior Vice President and General Counsel, Amex and Jan
Woo, Attorney, Division of Market Regulation, Commission, on
February 1, 2006.
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    Currently the original listing fees pursuant to Section 140 of the
Amex Company Guide for stock issues range from $35,000 to $65,000
(which includes a non-refundable application processing fee of $5,000)
depending on the number of shares to be listed. Amex proposes that the
original listing fees be increased as follows:

----------------------------------------------------------------------------------------------------------------
                                                                                                    Percentage
                        Number of shares                           Current fee*    Proposed fee*     increase
----------------------------------------------------------------------------------------------------------------
Less than 5,000,000 shares......................................         $35,000         $45,000              28
5,000,000 to 10,000,000 shares..................................          45,000          55,000              22
10,000,001 to 15,000,000 shares.................................          55,000          60,000               9
In excess of 15,000,000 shares..................................          65,000          70,000               8
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* Includes the non-refundable application-processing fee of $5,000.

    As indicated in the chart above, the percentage increase in the
original listing fees varies depending upon the number of shares to be
listed. Rather than increase each level the same percentage, the
Exchange chose to vary the percentage increases in order to remain
competitive with the original listing fees charged by other market
places. Based upon original listing fees in place at its competitors,
the Exchange determined to increase the fees by a larger percentage for
smaller companies than for larger companies. The proposed increases in
the original listing fees will not change the manner in which these
fees are applied--companies with a fewer number of shares will be
charged less than companies with a greater number of shares. The
Exchange's purpose for differentiating its original listing fees is
based on the Amex's business objective of attracting small to mid-size
companies and the recognition that the costs associated with listing
can be significant to a small or mid-size company. In addition, as a
general matter, companies with fewer shares tend to have less complex
structures, which may result in less staff time spent reviewing the
company's listing application.
    In addition, the original listing fee for non-U.S. companies listed
on a foreign stock exchange is currently 50% of the fees charged to
U.S. companies. Amex proposes that the original listing fee for non-
U.S. companies be a flat fee of $40,000, which will include the one-
time, non-refundable application-processing fee of $5,000. The original
listing fees currently paid by non-U.S. companies are significantly
lower than the rates paid by U.S. companies due to the additional costs
non-U.S. companies incur when listing in the United States. In order to
continue to recognize the costs faced by non-U.S. companies, the
Exchange chose to set a single rate that is below the lowest rate it
charges to U.S. companies, but is still competitive with rates charged
by other markets. Finally, the original listing fees for issues listed
pursuant to Sections 106 (currency and index warrants) and 107 (other
securities) of the Amex Company Guide will remain at the current rates.
    The annual fees set forth in Section 141 of the Amex Company Guide
currently range from $15,000 to $30,000 depending on the number of
shares outstanding. Amex proposes that the annual fees be increased as
follows:

----------------------------------------------------------------------------------------------------------------
                                                                                                    Percentage
                        Number of shares                            Current fee    Proposed fee      increase
----------------------------------------------------------------------------------------------------------------
5,000,000 shares or less........................................         $15,000         $16,500              10
5,000,001 to 10,000,000 shares..................................          17,500          19,000               9
10,000,001 to 25,000,000 shares.................................          20,000          21,500               8
25,000,001 to 50,000,000 shares.................................          22,500          24,500               9
50,000,001 to 75,000,000 shares.................................          30,000          32,500               8
In excess of 75,000,000 shares..................................          30,000          34,000              13
----------------------------------------------------------------------------------------------------------------

    As indicated in the chart above, the percentage increase in the
annual fees varies depending upon the number of shares outstanding.
Rather than increase each level the same percentage, the Exchange chose
to vary the percentage increases in order to remain competitive with
the annual fees charged by other market places. Based upon annual fees
in place at its competitors, the Exchange determined to increase the
fees by a larger percentage for its largest companies. The Exchange's
purpose for having lower annual fees for companies with fewer shares
outstanding is similarly based on its objective to retain the listings
of small to mid-size companies and a recognition that the on-going
costs associated with being a listed company have a greater impact on
the small to mid-size company. It should be noted that the Amex's
competitors also use a sliding scale

[[Page 6530]]

when applying original listing and annual issuer fees.
    In addition, the annual fees for issues listed pursuant to Sections
106 (currency and index warrants) and 107 (other securities) of the
Amex Company Guide will remain at their current rates.
    Finally, the Exchange is also proposing other minor technical
changes to Sections 140 and 141 of the Amex Company Guide, which will
not further alter the fees but will clarify the text of these Sections.
2. Statutory Basis
    Amex believes that the proposed rule change is consistent with
Section 6(b) of the Act \7\ in general and furthers the objectives of
Section 6(b)(4) of the Act \8\ in particular in that it is designed to
provide for the equitable allocation of reasonable dues, fees, and
other charges among its members and issuers and other persons using its
facilities. In addition, increasing original listing and annual fees
will provide the Exchange with the ability to cover increased expenses
related to enhancements in its trading technology, business services,
and regulatory programs.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Amex does not believe that the proposed rule change will impose any
burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others

    No written comments were solicited or received with respect to 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 the Exchange 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, as amended, 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 No. SR-Amex-2005-124 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-Amex-2005-124. 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 office of Amex. 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-2005-124 and should be submitted on or before March 1, 2006.

    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).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-1728 Filed 2-7-06; 8:45 am]

BILLING CODE 8010-01-P