Document ID: SEC-2008-1296-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: American Stock Exchange LLC
Posted Date: 2008-09-24T04:00Z

[Federal Register: September 24, 2008 (Volume 73, Number 186)]
[Notices]               
[Page 55185-55188]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24se08-152]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58570; File No. SR-Amex-2008-70]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 
1, To Revise Its Initial Listing Process To Eliminate the Current 
Appeal Process for Initial Listing Decisions, Add a New Confidential 
Pre-application Eligibility Review Process, and Upgrade Its Listing 
Requirements by Eliminating the Alternative Listing Standards

September 17, 2008.
    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 September 4, 2008, the American Stock Exchange LLC (``Amex'' or the 
``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 the Exchange. Amex 
filed Amendment No. 1 on September 17, 2008. 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

    In connection with its pending acquisition by NYSE Euronext, the 
parent company of the New York Stock Exchange LLC (``NYSE'') and NYSE 
Arca, Inc. (``NYSE Arca''), the Exchange desires to revise its initial 
listing process to more closely align it with the process in place at 
the NYSE, as well as to upgrade its listing requirements. To that end, 
the Exchange proposes to amend Sections 101, 201, 206 and

[[Page 55186]]

1201-1206 of the Amex Company Guide and add new Section 202 thereto. 
These proposed changes would (i) eliminate the current appeal process 
for initial listing decisions by the Exchange, including elimination of 
the two alternative listing standards on which almost all such initial 
listing appeals are based, and (ii) add a new mandatory confidential 
pre-application eligibility review process for the benefit of companies 
considering an initial listing on the Exchange. The Exchange is also 
proposing the addition of a temporary Section 1212T that will contain 
those current initial listing provisions of the Amex Company Guide that 
reference the alternative listing standards and other provisions of 
Part 12 that are applicable to such alternative standards, which 
provisions are otherwise being proposed for deletion from the Amex 
Company Guide. The temporary provisions of proposed Section 1212T would 
only apply to initial listing applications already filed and in process 
with the Exchange as of the date of effectiveness of this proposed rule 
change, which effective date will be the later of (i) the date of 
approval of the rule change by the Commission or (ii) the closing date 
of the acquisition of the Exchange by NYSE Euronext. The proposed rule 
change would also eliminate certain outdated provisions in Sections 206 
and 1202 of the Amex Company Guide and certain redundant language in 
Section 1201(d) thereof.
    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 Amex 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 IV below. The 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
    Pursuant to an agreement dated January 17, 2008, the Amex is being 
acquired by NYSE Euronext, the parent company of the NYSE and NYSE 
Arca. As part of its strategic business planning for the post-merger 
group, the Exchange examined certain aspects of its initial listing 
program, and determined to implement changes to the initial listing 
process to more closely align it with the NYSE, as well as to upgrade 
the listing requirements by eliminating the ability of an issuer which 
does not meet the regular listing standards to be approved for listing 
under the alternative listing standards.
    Sections 101(e) and 1203(c) of the Amex Company Guide currently 
provide that the securities of certain issuers which do not satisfy any 
of the Exchange's regular initial listing standards may nonetheless be 
eligible for initial listing on the Exchange pursuant to the Exchange's 
appeal procedures, which include authorization of approval of the 
listing by a Listing Qualifications Panel of the Exchange's Committee 
on Securities, if (a) the issuer satisfies one of two minimum numerical 
alternative listing standards and (b) the Listing Qualifications Panel 
makes an affirmative finding that there are mitigating factors that 
warrant listing pursuant to these alternative listing standards.\3\ In 
order to harmonize its initial listing process with the process in 
place at the NYSE, the Exchange proposes to amend Sections 101 and 
1201-1206 of the Amex Company Guide in order to eliminate the current 
appeal process for initial listing decisions by the Exchange. In 
addition, the Exchange is also proposing to eliminate the two 
aforementioned alternative listing standards on which almost all such 
initial listing appeals are based. A relatively small number of 
companies are listed on the Exchange each year under the two 
alternative listing standards that are being eliminated under the 
proposed rule change.
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    \3\ The issuer is also required to make an announcement through 
the news media that it has been approved for listing pursuant to the 
alternative listing standards. See Section 1203(c)(iii).
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    In conjunction with the changes discussed in the prior paragraph, 
the Exchange also proposes to amend Section 201 of the Amex Company 
Guide and add new Section 202 thereto to provide a new mandatory 
confidential pre-application eligibility review process for the benefit 
of companies considering an initial listing on the Exchange. Pursuant 
to this process, company officials seeking a listing on the Exchange 
would be required to undertake preliminary confidential discussions 
with the Exchange, prior to formal listing application, to determine 
whether its securities are eligible for listing approval. Only after a 
company has cleared the confidential pre-application eligibility review 
and has been authorized by the Exchange to proceed with the listing of 
its securities on the Exchange may it file an original listing 
application and complete the other formal steps in the original listing 
process pursuant to Section 202. The confidential pre-application 
eligibility review process would be comparable to the process in place 
at the NYSE as described in Sections 101, 104 and 701 of the NYSE 
Listed Company Manual.
    The information needed for the purpose of conducting a confidential 
pre-application eligibility review is set forth in Sections 210-222 of 
the Amex Company Guide. Such information from the company would 
include, for example, copies of (i) the latest periodic reports under 
the 1934 Act, such as the Form 10-K Annual Report (or a prospectus 
declared effective by the Commission that contains the company's latest 
audited financial statements), Form 10-Q Quarterly Report(s), and Form 
8-K Current Report(s); (ii) the latest proxy statement for the annual 
meeting of stockholders; (iii) the latest annual report distributed to 
stockholders; (iv) a qualified engineer's report with an estimate of 
proven reserves, in the case of an oil and gas company; (v) a qualified 
engineer's mining and reserve report, in the case of a mining company; 
and (vi) such other information or documentation, public or non-public, 
deemed necessary by the Exchange for it to make a determination 
regarding a security's original listing eligibility. There will be no 
charge to the company in connection with the confidential pre-
application eligibility review.
    The Exchange has determined that it is appropriate to strengthen 
and enhance its initial listing standards by requiring that all 
companies that list on the Exchange meet the requirements of the 
Exchange's regular initial listing standards. Further, the Exchange 
anticipates that the proposed new confidential pre-application 
eligibility review process will enable it to provide an issuer with 
guidance and clarification on whether or not it is eligible for listing 
on a more expeditious basis. The Exchange believes that the new 
confidential pre-application eligibility review process will provide a 
fair procedure, consistent with Section 6(b)(7) of the 1934 Act, for 
all issuers seeking listing, including those that receive an adverse 
determination. Specifically, consistent with the

[[Page 55187]]

Exchange's current review process, initial listing eligibility 
determinations must be made in accordance with the criteria specified 
in the Exchange's listing standards, following a rigorous staff 
analysis and managerial oversight. This structured review process, 
based on transparent standards, mitigates against erroneous 
determinations. Moreover, the Exchange's experience with its existing 
initial listing appeal process is that it has almost never been 
utilized, and never successfully, to appeal a staff determination on 
the basis that such determination was erroneous. Rather, the few 
appeals have been by issuers seeking listing under the two 
aforementioned alternative listing standards (which can only be 
achieved through the appeal process). The revised process would closely 
track the NYSE's longstanding process, which is reflected in the NYSE 
Listed Company Manual and has not, to the Exchange's knowledge, 
resulted in appeals of NYSE listing determinations to the Commission. 
Accordingly, the Exchange is confident that the revised process will be 
fair to issuers.
    The Exchange represents that it has considered how to transition 
the above-described rule changes and proposes the following treatment 
for issuers that have applications currently in process for an initial 
listing on the Exchange. Any initial listing applications that are 
already filed and in process with the Exchange as of the date of 
effectiveness of this proposed rule change (``Legacy Applications'') 
will be treated as if they were still governed by the initial listing 
procedures in the Amex Company Guide as in effect immediately prior to 
such date of effectiveness, which effective date will be the later of 
(i) the date of approval of the rule change by the Commission or (ii) 
the closing date of the acquisition of the Exchange by NYSE Euronext as 
further described below under ``Implementation.'' Consequently, during 
that transition period, companies with Legacy Applications would have 
the right to appeal the initial listing decision and to be evaluated 
for listing under the alternative initial listing standards that are 
being eliminated by this filing. To this end, the Exchange is proposing 
as part of this filing the addition of a temporary Section 1212T to the 
Amex Company Guide that will contain those current initial listing 
provisions of the Amex Company Guide that reference the alternative 
listing standards and other provisions of Part 12 that are applicable 
to such alternative standards, which provisions are otherwise being 
proposed for deletion from the Amex Company Guide in this filing. The 
temporary provisions of Rule 1212T will apply solely to the Legacy 
Applications and will otherwise be of no force or effect.
    In addition to the changes discussed above, the Exchange is also 
proposing three other minor changes of a ``housekeeping'' nature to the 
text of the Amex Company Guide. Section 206, containing an outdated and 
non-substantive reference to listing day would be eliminated. An 
outdated reference in Section 1202 to the Listing Investigations 
Department (which no longer exists) would be deleted under the proposed 
rule change. Finally, language in Section 1201(d) listing a number of 
non-quantitative factors that the Exchange will consider in evaluating 
an initial listing application would be eliminated under the proposal 
because those factors (and certain others) are already set forth in 
Section 101.
Implementation
    This rule filing is being made to implement a NYSE Euronext 
business plan for the Amex after the consummation of the transactions 
contemplated by the merger agreement dated January 17, 2008 among the 
Exchange, the Amex Membership Corporation, NYSE Euronext and certain 
other entities, whereby a successor to the Exchange will become an 
indirect, wholly-owned subsidiary of NYSE Euronext (the 
``Acquisition'').\4\ In the event that the Acquisition has not occurred 
prior to Commission approval of the proposed rule change, the effective 
date of the rule change will be postponed until the closing date of the 
Acquisition and the Exchange's rules will be annotated accordingly. In 
the event that the Acquisition has not been effected on or before 
December 31, 2008, the proposed rule change will not take effect and 
the Exchange will rescind the approved rule text by a separate filing 
with the Commission.
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    \4\ The transactions that will effectuate the Acquisition are 
described in more detail in Form 19b-4, File No. SR Amex-2008-62, 
originally filed with the Commission by the Exchange on July 23, 
2008, as amended.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the 1934 Act \5\ in general, and furthers the 
objectives of Section 6(b)(5) \6\ 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. 
More specifically, the Exchange believes that the proposed rule change 
is consistent with investor protection and the public interest because 
the upgrading of the Exchange's initial listing standards through 
elimination of the current alternative listing standards will further 
ensure that only well-qualified companies that all meet a uniform set 
of standards will be listed on the Exchange. Further, the Exchange 
believes that the proposed rule change will have the effect of removing 
impediments to and perfecting the mechanism of a free and open market 
and a national market system by providing a more streamlined and 
efficient initial listing process for the Exchange that is very closely 
aligned with the corresponding process that is currently in place at 
the NYSE.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change will impose no 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the 1934 Act.

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. 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 Amex 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:

[[Page 55188]]

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-2008-70 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Amex-2008-70. 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 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-2008-70 and should be submitted on 
or before October 15, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E8-22462 Filed 9-23-08; 8:45 am]

BILLING CODE 8010-01-P