Document ID: SEC-2007-0441-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2007-03-22T04:00Z

[Federal Register: March 22, 2007 (Volume 72, Number 55)]
[Notices]               
[Page 13540-13542]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22mr07-104]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55479; File No. SR-Amex-2006-114]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing of a Proposed Rule Change and Amendment No. 1 Thereto 
Clarifying the Continued Listing Standards for Units

March 15, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on December 4, 2006, 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 
substantially by Amex. On February 22, 2007, Amex 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.
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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

    The Exchange proposes to (1) amend Section 1003(g) of the Amex 
Company Guide to strengthen the procedures applicable to units when 
their components fall below continued listing standards and clarify the 
application of continued listing standards to individual components 
comprising units once some (but not all) of the units have separated 
into their component parts and (2) make minor, technical changes to 
Sections 1003(a), (c), (d) and (f) of the Amex Company Guide. The text 
of the proposal is available at Amex, at the Commission's Public 
Reference Room, and on Amex's Web site at http://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, 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, and the most significant aspects of such statements are 
set forth in Sections A, B, and C below.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Section 1003(g) of the Amex Company Guide currently provides that 
the Exchange will ``normally consider'' suspending or delisting units 
if any of their component parts do not meet the applicable continued 
listing standards. However, if one or more of the components is 
otherwise qualified for listing, such component may remain listed. For 
example, a unit comprised of both a common stock component and a debt 
component would face suspension or delisting procedures if either the 
common stock or the debt component no longer met its applicable 
continued listing standards. As a result, if the debt component failed 
to meet the continued listing standards for bonds, both the unit and 
such debt component would be subject to suspension or delisting 
procedures, but the common stock component could independently remain 
listed and continue to trade on the

[[Page 13541]]

Exchange, provided such common stock component met the continued 
listing standards for equity securities.
    The Exchange proposes to strengthen Section 1003(g) of the Amex 
Company Guide so that in the event a component of a unit does not meet 
its continued listing standards, the Exchange would no longer 
``consider'' suspending or delisting the unit, but would commence a 
formal, continued listing evaluation of such component and unit in 
accordance with Section 1009 of the Amex Company Guide. Section 1009 
sets forth the suspension and delisting procedures, timelines, and 
requirements applicable to issuers identified as being below certain 
continued listing standards. For example, an issuer of particular 
securities that receives notification from the Exchange that it is 
below the continued listing criteria for such securities must publicly 
announce receipt of such notification and the policies and standards 
upon which the determination is based.\3\
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    \3\ See Section 1009(j) of the Amex Company Guide.
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    The Exchange also proposes to add language to Section 1003(g) to 
clarify the applicability of certain continued listing standards 
relating to components of units that have separated. When units in good 
standing begin to separate into their component securities, the 
remaining units that are still intact and the components of those units 
which have separated may all be separately listed and continue to 
trade, provided that they meet the applicable continued listing 
standards. The proposal specifies that, in determining whether a 
particular component meets the continued listing distribution standards 
set forth in Section 1003(b) of the Company Guide, the distribution 
values for units that are intact and freely separable into their 
component parts and for separately-traded components will be 
aggregated. For example, if 120,000 shares of common stock are publicly 
held after their separation from their units, and 210,000 intact and 
freely separable units are publicly held, the common stock will be 
credited with having 330,000 shares publicly held, enabling it to 
satisfy one of the distribution standards for common stock, which 
requires at least 200,000 shares of common stock to be publicly 
held.\4\ If the units cease to exist or are no longer freely separable 
and/or listed on the Exchange, the separately-traded components will 
still be required to meet their applicable continued listing standards, 
but the distribution values will not be aggregated.\5\
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    \4\ See Section 1003(b)(i)(A) of the Amex Company Guide.
    \5\ See proposed Section 1003(g) of the Amex Company Guide. The 
Commission notes that under proposed Section 1003(g), if in the 
above example the units are no longer freely separable into common 
stock, there would be no aggregation of units with the common stock 
for purposes of evaluating whether the units and comment stock meet 
the continued listing standards.
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    The Exchange will also consider suspending trading in, or removing 
from listing, an individual component or unit if the distribution 
values of such component or unit become so reduced as to make continued 
listing inadvisable and despite the fact that the aggregated 
distribution values satisfy the continued listing distribution 
standards. In its review of the advisability of the continued listing 
of an individual component or unit under such circumstances, the 
Exchange proposes to take into account the trading characteristics of 
the component or unit and whether it would be in the public interest 
for trading in such component or unit to continue. The Exchange 
believes that this proposal will enhance the transparency of its 
continued listing standards.
    The Exchange also proposes to make technical revisions to Sections 
1003(a), (c), (d) and (f) in order to consistently use the term 
``issuer'' as opposed to ``company.''
2. Statutory Basis
    The proposed rule change is consistent with Section 6 of the 
Act,\6\ in general, and furthers the objectives of Section 6(b)(5),\7\ 
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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    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

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

    The Exchange did not receive any 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:

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-2006-114 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-2006-114. 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 the filing 
also will be available for inspection and copying at the principal 
office of the Exchange. All

[[Page 13542]]

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-2006-114 and should be 
submitted on or before April 12, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-5205 Filed 3-21-07; 8:45 am]

BILLING CODE 8010-01-P