Document ID: SEC-2008-0464-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: American Stock Exchange LLC
Posted Date: 2008-03-25T04:00Z

[Federal Register: March 25, 2008 (Volume 73, Number 58)]
[Notices]               
[Page 15807-15809]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25mr08-104]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57524; File No. SR-Amex-2008-05]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Order Granting Accelerated Approval to Proposed 
Rule Change as Modified by Amendment No. 1 Thereto Relating to Smaller 
Reporting Companies

 March 18, 2008.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Exchange Act'') and Rule 19b-4 thereunder,\2\ notice is hereby 
given that on January 25, 2008, 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 prepared by the Exchange. 
On March 13, 2008, Amex submitted Amendment No. 1 to the proposed rule 
change.\3\ This order provides notice of the proposed rule change and 
approves the proposed rule change, as amended, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 replaced and superseded the original filing 
in its entirety. Amendment No. 1 was filed to make revisions to the 
rule filing and to the text of the proposed rule change to reflect 
recently approved changes to the Amex Company Guide. See Securities 
Exchange Act Release No. 57393 (February 27, 2008), 73 FR 11962 
(March 5, 2008) (order approving SR-Amex-2007-79). Amendment No. 1 
also made other, technical corrections.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Sections 801, 802, 803, 807, and 809 
of the Amex Company Guide (``Company Guide'') to conform to recent 
Commission amendments to rules and forms under the Securities Act of 
1933 \4\ ( ``Securities Act'') and the Exchange Act relating to smaller 
reporting companies.
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    \4\ 15 U.S.C. 77(a) et seq.
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    The text of the proposed rule change is available on the Amex's Web 
site at http://www.amex.com, the Office of the Secretary, the 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, 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Commission recently adopted amendments to the disclosure and 
reporting requirements under the Securities Act and the Exchange Act in 
order to simplify and provide regulatory relief for smaller companies 
(the ``Smaller Reporting Company

[[Page 15808]]

Amendments'').\5\ The Exchange proposes to amend the provisions of the 
Amex Company Guide (``Company Guide'') that refer to the small business 
issuer rules and forms under the Securities Act and the Act to make the 
references consistent with Smaller Reporting Company Amendments. At the 
same time, the Exchange proposes to amend or delete, in the relevant 
Company Guide sections, portions of those sections in the Company Guide 
that have become obsolete or otherwise need to be updated.
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    \5\ See Securities Exchange Act Release Nos. 33-8876; 34-56994; 
and 39-2451, 73 FR 934 (January 4, 2008) (File No. S7-15-07) (the 
``Smaller Reporting Company Regulatory Relief and Simplification 
Release'').
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    As described by Amex, the intent of the Smaller Reporting Company 
Amendments, which became effective on February 4, 2008, is to give 
smaller companies faster and easier access to capital when they need it 
or when market conditions are favorable. Specifically, the former 
``small business issuer'' and ``non-accelerated filers'' categories, to 
the extent feasible, were combined to create a new expanded category 
called ``Smaller Reporting Company.'' Companies that have less than $75 
million in public equity float will now qualify as Smaller Reporting 
Companies.\6\ Companies without a calculable public equity float will 
qualify if their revenues were below $50 million in the last fiscal 
year.\7\ The definition of Smaller Reporting Company effectively 
expands the number of companies that qualify for the scaled disclosure 
requirements previously available to small business issuers.\8\
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    \6\ 17 CFR 230.405(1) and (2) and 17 CFR 240.12b-2.
    \7\ 17 CFR 230.405(3) and 17 CFR 240.12b-2.
    \8\ See the Smaller Reporting Company Regulatory Relief and 
Simplification Release.
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    In addition, the Regulation S-B \9\ scaled disclosure requirements 
were integrated into Regulation S-K \10\ as of the effective date of 
the Smaller Reporting Company Amendments, and Forms 10-QSB and 10-KSB 
\11\ are being eliminated, effective October 31, 2008 and March 15, 
2009, respectively.\12\
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    \9\ Formerly 17 CFR 228.10-228.703.
    \10\ 17 CFR 229.10-229.1123.
    \11\ 17 CFR 249.308b and 17 CFR 249.310b.
    \12\ See the Smaller Reporting Company Regulatory Relief and 
Simplification Release.
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    In order to conform the Amex Company Guide to the Smaller Reporting 
Company Amendments, the Exchange proposes to amend the following 
sections in its Company Guide:
    Section 801. The Exchange proposes to amend Section 801(h) of the 
Company Guide to replace the reference to ``Small Business Issuer'' 
with a reference to ``Smaller Reporting Company,'' including a 
reference to the definition of Smaller Reporting Company in Item 
10(f)(1) of Regulation S-K,\13\ where the term Smaller Reporting 
Company is defined.
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    \13\ 17 CFR 229.10(f)(1).
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    Section 802. The Exchange proposes to amend Section 802(a) of the 
Company Guide to remove the reference to ``Small Business Issuer'' and 
replace it with a reference to ``Smaller Reporting Company.'' However 
Amex will retain the cross-reference to Section 801(h) of the Company 
Guide for the definition of Smaller Reporting Company.
    Section 803B(2)(a)(iii): The Exchange proposes to amend Section 
803B(2)(a)(iii) of the Company Guide, which sets out the requirements 
for independent directors and audit committees for Amex-listed issuers, 
to update the references to Regulation S-K and Regulation S-B. 
Specifically, the Exchange proposes to remove the reference to Item 
401(h) of Regulation S-K \14\ and Item 401(e) of Regulation S-B \15\ 
and replace it with a reference to Item 407(d)(5)(ii) \16\ and Item 
407(d)(5)(iii) \17\ of Regulation S-K.
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    \14\ 17 CFR 229.401(h).
    \15\ Formerly 17 CFR 228.401(e).
    \16\ 17 CFR 229.407(d)(5)(ii).
    \17\ 17 CFR 229.407(d)(5)(iii).
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    Section 803B(2)(c). The Exchange proposes to amend Section 
803B(2)(c) of the Company Guide to remove and replace the reference to 
small business issuers with a reference to the new term, ``Smaller 
Reporting Companies,'' and to include a reference to Item 10(f)(1) of 
Regulation S-K,\18\ where the term Smaller Reporting Company is 
defined. The independent director requirements (50% independent) and 
audit committee requirements (a minimum of two independent directors) 
that applied to small business issuers would now apply to issuers that 
qualify as Smaller Reporting Companies.
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    \18\ 17 CFR 229.10(f)(1).
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    Section 803B(6)(a) and (b) and Commentary .10. The Exchange 
proposes to remove the last sentence of Section 803(6)(a), which states 
that the text of Rule 10A-3 is reproduced in Commentary .10 to Section 
803, and to delete in its entirety Commentary .01 to Section 803, which 
sets out Rule 10A-3 in full. The Exchange originally included Rule 10A-
3 in the Company Guide for the convenience of listed issuers at the 
time of the adoption of the Exchange's related rules in 2003, and the 
version of Rule 10A-3 now included in the Company Guide is out of date. 
The Exchange now believes that Rule 10A-3 has been in place for a long 
enough period that it is no longer necessary to include it in the 
Company Guide.
    The Exchange proposes to amend Section 803B(6)(b) of the Company 
Guide to remove the references to ``Small Business Issuer'' and replace 
them with references to ``Smaller Reporting Company.'' As a result, the 
periods allowed to small business issuers set out in Section 803B(6) to 
cure a failure to comply with the audit committee composition 
requirements would now apply to issuers that qualify as Smaller 
Reporting Companies.
    Section 807: The Exchange proposes to amend Section 807 of the 
Company Guide in order to remove the reference to the definition of the 
``code of ethics'' set forth in Regulation S-B, which is no longer 
appropriate given the integration of the Regulation S-B \19\ scaled 
disclosure requirements into Regulation S-K.
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    \19\ Formerly 17 CFR 228.10-228.703.
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    The Exchange also proposes to amend Commentary .01 to Section 807 
of the Company Guide in order to conform the Amex provision regarding 
code of conduct waivers with the requirements of Section B of Form 8-
K.\20\ Accordingly, the Exchange proposes to change the time period in 
which a company must report a waiver of its code of conduct and ethics 
for directors or executive officers from five days to four days. The 
Exchange also proposes to make clear that if the event occurs on a 
Saturday, Sunday or holiday on which the Commission is not open for 
business, then the four business-day period shall begin to run on, and 
include, the first business day thereafter.\21\
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    \20\ 17 CFR 249.308.
    \21\ The Commission notes that this language conforms to the 
language set forth in Paragraph B1 of Form 8-K.
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    Section 809. Section 809 of the Company Guide relates to the 
effective dates and transition terms for the corporate governance 
provisions now set out in Part 8 of the Company Guide. The Exchange 
proposes to revise Section 809 to remove references to effective dates 
and transition dates that have passed and are, therefore, no longer 
relevant. Specifically, sub-Sections 809(a), (d), (e) and (f) are 
proposed to be deleted in their entirety, and sub-Sections 809 (b) and 
(c) will become sub-Sections (a) and (b), respectively. Sub-Section 
809(a) will be revised to replace references to ``small-business 
issuer'' with ``Smaller Reporting Company.'' Finally, the

[[Page 15809]]

Exchange proposes to delete Commentary .01, which re-stated Section 121 
as it was in effect immediately prior to Commission approval of Section 
809, in its entirety, since the transition periods that required its 
inclusion have expired.
2. Statutory Basis
    The Exchange states that the proposed rule change is consistent 
with Section 6(b) of the Exchange Act \22\ in general, and furthers the 
objectives of Section 6(b)(5) of the Exchange Act \23\ 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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    \22\ 15 U.S.C. 78f(b).
    \23\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change does not 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

    No written comments were solicited or received with respect to 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 Exchange 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-2008-05 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-2008-05. 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, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. 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-2008-05 and should be 
submitted on or before April 15, 2008.

IV. Commission's Findings and Order Granting Accelerated Approval of 
the Proposed Rule Change

    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.\24\ In 
particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Exchange Act,\25\ which 
requires, among other things, that the Exchange's rules be 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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    \24\ In approving this proposal, the Commission has considered 
its impact on efficiency, competition, and capital formation. See 15 
U.S.C. 78c(f).
    \25\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that the proposed rule change is reasonable 
and appropriate because it would conform the rules governing a small 
issuer's eligibility for relief under specified provisions of the 
Exchange's corporate governance listing standards with the rules 
governing a small issuer's eligibility for relief pursuant to the 
Securities Act and the Exchange Act as recently amended. In addition, 
the proposed rule change would remove references in Amex's Company 
Guide that became obsolete in light of the Smaller Reporting Company 
Amendments or are otherwise outdated; and conform the Exchange's rule 
relating to disclosure of waiver of an issuer's code of conduct with 
the requirement of Form 8-K.
    The Commission finds good cause, consistent with Section 19(b)(2) 
of the Exchange Act,\26\ for approving this proposed rule change before 
the thirtieth day after the publication of notice thereof in the 
Federal Register. As noted by Amex, the Smaller Reporting Company 
Amendments became effective on February 4, 2008, and in the interest of 
timeliness and in order to avoid confusion, the Commission believes 
that accelerated approval is warranted and that no reasonable purpose 
would be served by delaying implementation of this and the other 
technical and conforming amendments made by the proposed rule change.
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    \26\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Exchange Act,\27\ that the proposed rule change (SR-Amex-2008-05), as 
modified by Amendment No. 1, be, and it hereby is, approved on an 
accelerated basis.
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    \27\ Id.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\28\
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    \28\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-5917 Filed 3-24-08; 8:45 am]

BILLING CODE 8011-01-P