Document ID: SEC-2006-0440-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2006-04-04T04:00Z

[Federal Register: April 4, 2006 (Volume 71, Number 64)]
[Notices]               
[Page 16839-16841]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04ap06-75]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53563; File No. SR-Amex-2005-125]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto 
Relating to Dual Listing

March 29, 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 5, 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 March 21, 
2006, Amex filed Amendment No. 1. 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

    Amex proposes to amend (i) Sections 140 and 141 of the Amex Company 
Guide and the Amex Fee Schedule to reduce the listing fees for 
companies listed on another securities market that dual list on the 
Amex, and (ii) Amex Rule 118 to (a) include in the scope of the Rule 
securities listed on the Nasdaq Capital Market (formerly referred to as 
the Nasdaq SmallCap Market,) \3\ (``NCM'') and (b) accommodate the dual 
listing of securities listed on the NCM and the Nasdaq National Market 
(``NNM'').\4\ NNM and NCM are tiers of The Nasdaq Stock Market, which 
is operated by The Nasdaq Stock Market, Inc. (NNM and NCM are 
collectively referred to as ``Nasdaq.'') In addition, the Exchange 
proposes minor, technical changes to Amex Rules 7, 24, 109, 115, 126, 
128A, 131, 135A, 156, 170, 190 and 205, and Sections 142 and 950 of the 
Company Guide to reflect the proposed changes to Amex Rule 118. 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, Amex, and at the 

Commission's Public Reference Room.
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    \3\ See Securities Exchange Act Release No. 52489 (September 21, 
2005), 70 FR 56948 (September 29, 2005)(SR-NASD-2005-108).
    \4\ The instant proposed rule change is similar to rules of the 
Nasdaq and PCX Equities, Inc. (``PCXE'')(now known as NYSE Arca 
Equities, Inc.), which address the dual listing of securities. 
Nasdaq Rules 4510 and 4520 waive Nasdaq listing fees for New York 
Stock Exchange listed companies that dual list on Nasdaq. PCXE's 
Schedule of Fees and Charges for Exchange Services sets forth 
reduced listing fees for dual listed securities, and PCXE Rule 
1.1(aa) defines ``Nasdaq Security'' as any security designated as an 
eligible security pursuant to the UTP Plan (as defined below) that 
is either listed on PCXE or as to which UTP (as defined below) have 
been granted.
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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. 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
    In order to encourage the listing on Amex of companies already 
listed on another market, the Exchange proposes to reduce the listing 
fees applicable to such dual listing issuers and to make appropriate 
rule changes to accommodate the listing and trading on Amex of issuers 
whose securities are also listed on Nasdaq.
    Specifically, the Exchange proposes to amend (i) Sections 140 and 
141 of the Company Guide and the Fee Schedule to reduce the initial and 
annual listing fees for companies that dual list on Amex, and (ii) Amex 
Rule 118 to expand the scope of the Rule to cover NCM securities and 
also to accommodate the dual listing of Nasdaq securities. The Exchange 
will make an independent determination of whether dual listing issuers 
satisfy all applicable listing requirements and will require such 
issuers to meet all applicable Amex listing standards on a continuous 
basis. Ultimately, the Exchange would

[[Page 16840]]

encourage dual listed issuers to transfer their listings to Amex.
    (i) Fees. The Exchange proposes to amend Section 140 (Original 
Listing Fees) and Section 141 (Annual Listing Fees) of the Company 
Guide and the Fee Schedule to provide for reduced fees for issuers 
listed on other markets that also list on Amex. The discounted listing 
fees for companies already listed on another market are proposed as an 
incentive to companies to compare the services and quality of Amex 
market without having to pay full listing fees on both markets. In 
addition to providing an opportunity to compare the services and 
quality of the Amex market with their current market, Amex believes 
that dual listing on Amex with its auction system should benefit 
investors and shareholders by increasing liquidity, reducing execution 
time, and narrowing spreads. Amex believes the comparison between 
executions on Amex and on the other markets will enable companies to 
assess the benefit of an Amex listing.
    Amex believes that charging reduced fees to dual listed issuers is 
warranted for a number of reasons. Listed companies are already 
familiar with the regulatory and compliance requirements of a listing 
regime. The Exchange will conduct a full and independent review of each 
dual listed issuer's compliance with Amex listing standards, however, 
the probability that an application from an issuer seeking to dually 
list will raise regulatory and other compliance issues is lower than 
for issuers not already listed elsewhere. The Exchange believes that 
the review of listing applications of dually listed companies will in 
most cases be less time-consuming and present fewer issues than the 
review of an application from an issuer not already listed on another 
market despite the fact that both reviews will be subject to the same 
degree of regulatory scrutiny. Also, companies listed on another market 
will already have paid initial listing fees and will be subject to 
continued listing fees; Amex believes that a reduction in the fees the 
Exchange charges will encourage these companies to apply for a listing 
on Amex, which will, in turn, promote competition among markets 
consistent with Section 11A(a)(1)(C)(ii) of the Act.\5\
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    \5\ 15 U.S.C. 78k-1(a)(1)(C)(ii).
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    Currently, initial listing fees range from $40,000 to $65,000 
depending on the issuer's aggregate total shares outstanding. In 
addition, there is a one-time, non-refundable application processing 
fee, which is $5,000, for companies that do not have a stock or warrant 
issue listed on the Amex. For companies that dually list on Amex, the 
Exchange proposes to charge 50% of the applicable initial listing fee 
and application processing fee.\6\ As a result, for dual listed 
companies, the maximum initial listing fee, including the application 
processing fee, would be $35,000 instead of $70,000. As noted above, 
the Exchange believes that applications from issuers already listed on 
another U.S. market are likely to present fewer regulatory and 
compliance issues based on their prior experience as a listed company 
and therefore a lower fee is warranted.
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    \6\ The $40,000 initial listing fee, including the application 
processing fee, currently applicable to non-U.S. companies listed on 
foreign stock exchanges, will not be affected by the proposed rule 
change.
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    Dual listed companies will be required to meet all applicable Amex 
listing standards on a continuing basis. Annual fees currently range 
from $16,500 to $34,000, depending on the issuer's aggregate total 
shares outstanding. The Exchange proposes to charge 50% of the annual 
fee for a period of five years from the date of initial listing for 
companies that dually list on Amex. If, during the five-year period, a 
dual listing issue subsequently lists exclusively on Amex, the Exchange 
will assess the standard annual fee starting in the first full calendar 
year following the change to an exclusive listing. At the end of the 
five-year period, Amex will assess, on a pro-rated basis, the standard 
annual fee for the balance of the then current calendar year. 
Thereafter, Amex will assess the standard annual fee.
    The Exchange believes that it is appropriate to charge dually 
listed issuers an annual fee to cover the cost of issuer services, 
including regulatory oversight, but that reduced annual fees for dual 
listed issuers are appropriate as it would be inequitable to charge 
dually listed issuers the full annual fee as they are also paying these 
fees to another market. The Exchange believes that such a reduction 
serves as an incentive to issuers, which by listing on a second market 
are taking on another set of regulations, to compare listing markets. 
It also reflects the fact that dually listed issuers are already 
subject to regulation by another market and, the Exchange believes, are 
likely to raise fewer regulatory issues and therefore require less 
staff time on an ongoing basis.
    (ii) Amex Rules and Trading Operations. While Amex rules do not 
specifically contemplate dual listings, with respect to companies 
listed on another registered national securities exchange, no changes 
to the rules, or to trading operations, are required. Securities listed 
on national securities exchanges (other than Nasdaq) are designated as 
national market system securities under the Consolidated Quotation 
Service (``CQ'') and Consolidated Tape Association (``CTA'') national 
market system plans, just as are other Amex-listed securities, so the 
dual listing on Amex of securities listed on such exchanges does not 
conflict with existing Amex trading rules or operations. Nasdaq 
securities, on the other hand, are subject to a different set of 
trading rules from those designated as national market system 
securities under the CQ and CTA plans.\7\ Amex proposes changes to 
certain of its rules to clarify how trading and reporting of 
transactions in Nasdaq securities would be accomplished.
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    \7\ Based on the January 13, 2006 Commission release regarding 
Nasdaq's registration as a national securities exchange, Nasdaq 
anticipates commencing operations as an exchange on April 1, 2006. 
See Securities Exchange Act Release No. 53128 (January 13, 2006), 71 
FR 3550 (January 23, 2006)(10-131). Nasdaq has indicated that the 
trading rules regarding its quotation and trading systems will 
remain essentially the same following such registration as a 
national securities exchange.
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    Amex Rule 118 (Trading in Nasdaq National Market Securities) 
currently provides for the trading of NNM securities pursuant to 
unlisted trading privileges (``UTP''), in accordance with provisions of 
the Joint Self-Regulatory Organization Plan Governing the Collection, 
Consolidation and Dissemination of Quotation and Transaction 
Information for Nasdaq-Listed Securities Traded on Exchanges on an 
Unlisted Trading Privileges Basis (``UTP Plan''); however, Amex Rule 
118 does not currently include NCM securities. Amex proposes to amend 
the definition of NNM securities in Amex Rule 118 so that it will now 
include (i) NCM securities and (ii) NNM and NCM securities that are 
listed on the Amex. As a result, the same provisions applicable to NNM 
securities traded on a UTP basis on Amex will cover NCM securities 
traded on a UTP basis on Amex and NNM and NCM securities with dual 
listings on Amex including Amex Rules 1, 3, 7, 24, 115, 118, 126, 170, 
190 and 205, and Sections 142 and 950 of the Company Guide. For 
example, Amex Rule 7 governing short sales will not apply to dually 
listed NNM or NCM securities.
    The Exchange also proposes minor, technical changes to Amex Rules 
7, 24, 109, 115, 126, 128A, 131, 135A, 156, 170, 190 and 205, and 
Sections 142 and 950 of the Company Guide to reflect the revised 
definition of NNM securities and changes to Rule 11Ac1-1 under the

[[Page 16841]]

Act.\8\ For example, the Exchange proposes to amend Commentary .02 to 
Amex Rule 115 to remove the reproduced text of Rule 11Ac1-1 under the 
Act.
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    \8\ See Securities Exchange Act Release No. 51808 (June 9, 
2005); 70 FR 37496 (June 29, 2005)(S7-10-04). 17 CFR 242.602.
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2. Statutory Basis
    Amex believes that the proposed rule change is consistent with 
Section 6(b) of the Act,\9\ in general, and furthers the objectives of 
Sections 6(b)(4) \10\ and 6(b)(5) of the Act,\11\ in particular, in 
that it is designed to provide an equitable allocation of reasonable 
dues, fees and other charges among members and issuers and other 
persons using the Exchange's facilities, and 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 regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, 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; and is not designed to 
permit unfair discrimination between customers, issuers, brokers, or 
dealers, or to regulate by virtue of any authority conferred by the Act 
matters not related to the purpose of the Act or the administration of 
the Exchange.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4).
    \11\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Amex believes the proposed rule change does not impose any burden 
on competition that is not necessary or appropriate in furtherance of 
the purposes of the Act. Specifically, the Exchange believes that the 
proposed rule change will enhance competition by allowing issuers 
listed on other markets to add a listing on Amex without being required 
to pay fees that are duplicative of the fees already paid to the other 
market.

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 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-2005-125 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-2005-125. 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 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-2005-125 and should be submitted on or before April 
25, 2006.\12\
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    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Nancy M. Morris,
Secretary.
[FR Doc. E6-4828 Filed 4-3-06; 8:45 am]

BILLING CODE 8010-01-P