Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 1 Thereto, Relating to Amendments to Section 107 of the Company Guide, 27602-27604 [E7-9364]

Download as PDF cprice-sewell on PROD1PC66 with NOTICES 27602 Federal Register / Vol. 72, No. 94 / Wednesday, May 16, 2007 / Notices Rule 15a–6 (17 CFR 240.15a–6) under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) provides, among other things, an exemption from brokerdealer registration for foreign brokerdealers that effect trades with or for U.S. institutional investors through a U.S. registered broker-dealer, provided that the U.S. broker-dealer obtains certain information about, and consents to service of process from, the personnel of the foreign broker-dealer involved in such transactions, and maintains certain records in connection therewith. These requirements are intended to ensure (a) that the U.S. broker-dealer will receive notice of the identity of, and has reviewed the background of, foreign personnel who will contact U.S. institutional investors, (b) that the foreign broker-dealer and its personnel effectively may be served with process in the event enforcement action is necessary, and (c) that the Commission has ready access to information concerning these persons and their U.S. securities activities. It is estimated that approximately 2,000 respondents will incur an average burden of three hours per year to comply with this rule, for a total burden of 6,000 hours. At an average cost per hour of approximately $100, the resultant total cost of compliance for the respondents is $600,000 per year (2,000 entities × 3 hours/entity × $100/hour = $600,000). Written comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency’s estimate of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. Direct your written comments to R. Corey Booth, Director/Chief Information Officer, Securities and Exchange Commission, C/O Shirley Martinson, 6432 General Green Way, Alexandria, VA 22312 or send an e-mail to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB within 60 days of this notice. VerDate Aug<31>2005 15:27 May 15, 2007 Jkt 211001 Dated: May 10, 2007. J. Lynn Taylor, Assistant Secretary. [FR Doc. E7–9412 Filed 5–15–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55733; File No. SR–Amex– 2007–34] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 1 Thereto, Relating to Amendments to Section 107 of the Company Guide May 10, 2007. 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 April 5, 2007, 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 substantially prepared by the Exchange. On May 4, 2007, the Exchange filed Amendment No. 1 to the proposed rule change. This order provides notice of the proposed rule change, as modified by Amendment No. 1, and approves the proposed rule change, as amended, on an accelerated basis. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend: (1) Sections 107A(b) and 107D(a) of the Amex Company Guide to provide an exception to the minimum public distribution requirement of one million units for issuances traded in thousand dollar denominations, and (2) Sections 107A(b), 107C(a) and 107D(a) of the Amex Company Guide to provide an exception to the 400 public shareholder requirement for securities that are redeemable at the option of the holders thereof on at least a weekly basis. The text of the proposed rule change is available at Amex, the Commission’s Public Reference Room, and www.amex.com. 1 15 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00065 Fmt 4703 Sfmt 4703 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 Statutory Basis for, the Proposed Rule Change 1. Purpose Pursuant to Section 107 of the Amex Company Guide, the Exchange may approve for listing and trading securities which cannot be readily categorized under the listing criteria for common and preferred securities, bonds, debentures, or warrants (‘‘Section 107 Securities’’).3 The general listing criteria relating to issuers and issuances are set forth in Section 107A of the Company Guide. In connection with each potential listing of Section 107 Securities, the Exchange evaluates each security and issuance against the following criteria in Section 107A (and correspondingly in Sections 107B, 107C,4 107D, and 107E): (1) A principal amount/aggregate market value of $4 million or greater, and (2) a minimum public distribution requirement of one million trading units with a minimum of 400 public shareholders, except that, if traded in thousand dollar denominations, then no minimum number of holders. In addition, the listing criteria also requires that the issuer must have assets in excess of $100 million, stockholders’ equity of at least $10 million, and pre-tax income of at least $750,000 in the last fiscal year or in two of the three prior fiscal years. In the case of an issuer who is unable to satisfy the earnings criteria stated in Section 101 of the Company Guide, the Exchange will require the issuer to have the following: (a) Assets in excess of $200 million and stockholders’ equity of 3 See Securities Exchange Act Release No. 27753 (March 1, 1990), 55 FR 8626 (March 8, 1990) (SR– Amex–89–29) (approving the listing guidelines under Section 107 for new securities not otherwise covered under existing sections of the Company Guide). 4 The minimum public distribution requirement for Index-Linked Exchangeable Notes set forth in Section 107C of the Amex Company Guide is 150,000 notes rather than one million trading units. E:\FR\FM\16MYN1.SGM 16MYN1 Federal Register / Vol. 72, No. 94 / Wednesday, May 16, 2007 / Notices at least $10 million; or (b) assets in excess of $100 million and stockholders’ equity of at least $20 million. Minimum Public Distribution The first part of the proposal codifies an exception to Sections 107A(b) and 107D(a) of the Amex Company Guide so that certain issuances of Section 107 Securities may be listed even though the minimum public distribution requirement of one million units is not met. This exception, however, is conditioned on whether or not the issuance is traded in thousand dollar denominations. Sections 107A (General Criteria) and 107D (Index-Linked Securities) currently require a minimum public distribution requirement of one million trading units and a minimum of 400 public shareholders, except, if traded in thousand dollar denominations, then no minimum number of holders. Amex notes that, without the exception to the one million unit minimum public distribution requirement, the Exchange would be unable to list certain Section 107 Securities in thousand dollar denominations having a market value of less than $1 billion. Amex believes the proposed exception to be a reasonable accommodation for those issuances in thousand dollar denominations. Accordingly, the proposal amends the rule text of Section 107A(b) and 107D(a) so that the minimum public distribution and minimum public shareholders requirements will not be applicable to an issue traded in thousand dollar denominations. cprice-sewell on PROD1PC66 with NOTICES Minimum Public Shareholders The purpose of the second part of the proposal is to provide an exception to Sections 107A(b), 107C(a), and 107D(a) of the Amex Company Guide so that Section 107 Securities may be listed even though there may be less than 400 public shareholders at the time of listing.5 This exception will be conditioned on whether the particular issue provides for the redemption of securities at the option of the holders on at least a weekly basis. Therefore, the revision to Sections 107A(b), 107C(a), and 107D(a) will provide that the minimum public shareholders requirement will not apply if the securities are redeemable at the option of the holders thereof on at least a weekly basis. 5 A revision to Section 107A(b) of the Amex Company Guide will also affect Sections 107B and 107E relating to equity linked term notes and trust certificate securities, respectively, because these provisions refer to Section 107A for purposes of meeting the ‘‘General Criteria.’’ VerDate Aug<31>2005 15:27 May 15, 2007 Jkt 211001 Over the past several years, the Exchange has added generic listing standards in Section 107 of the Company Guide for Equity Linked Term Notes, Index-Linked Exchangeable Notes, Index-Linked Securities, and Trust Certificate Securities. These requirements are set forth in Sections 107B,6 107C, 107D,7 and 107E 8 of the Amex Company Guide, respectively. Currently, for each issuance of the foregoing Section 107 Securities, there must be a minimum of 400 public shareholders, except when the issue is traded in thousand dollar denominations. The Exchange submits that an additional exception to the 400 holder requirement is appropriate for certain securities which provide for redemption at the option of the holders on at least a weekly basis. The Exchange believes that a weekly redemption right will ensure a strong correlation between the market price of Section 107 Securities and the performance of the underlying asset, such as a single security or basket of securities and/or securities index, as holders will be unlikely to sell their securities for less than their redemption value if they have a weekly right to redeem such securities for their full value. In addition, in the case of certain Section 107 Securities with a weekly redemption feature, the issuer may have the ability to issue new securities from time to time at market prices prevailing at the time of sale, at prices related to market prices, or at negotiated prices. The Exchange believes that this provides a ready supply of new securities, thereby reducing the potential that Section 107 Security market prices will be affected by a scarcity of available securities. In addition, the ability to issue new securities may assist in maintaining a strong correlation between the market price and indicative value, based largely on potential arbitrage opportunities that 6 See Securities Exchange Act Release No. 32343 (May 20, 1993), 58 FR 30833 (May 27, 1993) (SR– Amex–92–42) (approving the listing and trading of Equity Linked Term Notes). See also Securities Exchange Act Release No. 47055 (December 19, 2002), 67 FR 79669 (December 30, 2002) (SR– Amex–2002–110) (increasing the maximum number of equity securities permitted to be linked to an Equity Linked Term Note); Securities Exchange Act Release No. 42582 (March 27, 2000), 65 FR 17685 (April 4, 2000) (SR–Amex–99–42) (revising Section 107B of the Company Guide). 7 See Securities Exchange Act Release No. 51258 (February 25, 2005), 70 FR 10700 (March 4, 2005) (SR–Amex–2005–001) (adopting generic listing standards for Index-Linked Securities). 8 See Securities Exchange Act Release No. 50355 (September 13, 2004), 69 FR 56252 (September 20, 2004) (SR–Amex–2004–23) (approving generic listing standards for Trust Certificate Securities). PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 27603 should mitigate the effect of price differentials. Amex believes that the ability to list certain Section 107 Securities with these characteristics without any specific requirements as to the number of holders is important to the successful listing of such securities. Issuers issuing these types of Section 107 Securities generally do not intend to do so by way of an underwritten offering, but instead, initially distribute the securities similar to the manner in which exchange-traded funds or ‘‘ETFs’’ are brought to market. In the case of an ETF, shares are initially launched or distributed without a significant distribution event, with the share float increasing over time as securities in creation unit size are issued from the issuer at net asset value. The Exchange states that, because of market dynamics and the purchasing behavior of investors, it is difficult for an issuer to be able to guarantee a sufficient number of public shareholders or investors on the date of listing in order to meet the 400 shareholders requirement. However, the Exchange believes that this difficulty in ensuring 400 shareholders on the listing date is not indicative of a lack of liquidity and/or adequate distribution of the securities. Accordingly, the Exchange submits that the existence of a weekly redemption option justifies this limited exception to the 400 public shareholder requirement. 2. Statutory Basis The proposal is consistent with Section 6(b) of the Act,9 in general, and Section 6(b)(5) of the Act,10 in particular, in that it is designed 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 facilitating transactions in securities, and to remove impediments to, and perfect the mechanism of a free and open market and a national market system. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. 9 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 10 15 E:\FR\FM\16MYN1.SGM 16MYN1 27604 Federal Register / Vol. 72, No. 94 / Wednesday, May 16, 2007 / Notices C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others IV. Commission’s Findings and Order Granting Accelerated Approval of the Proposed Rule Change After careful review, 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 III. Solicitation of Comments securities exchange.11 In particular, the Commission finds that the proposed Interested persons are invited to rule change is consistent with Section submit written data, views, and 6(b)(5) of the Act,12 which requires that arguments concerning the foregoing, an exchange have rules designed, among including whether the proposed rule other things, to promote just and change is consistent with the Act. equitable principles of trade, to remove Comments may be submitted by any of impediments to and perfect the the following methods: mechanism of a free and open market Electronic Comments and a national market system, and, in general, to protect investors and the • Use the Commission’s Internet public interest. The Commission comment form (http://www.sec.gov/ believes that this proposal should rules/sro.shtml); or benefit investors by providing an • Send an e-mail to ruleexception to the minimum public comments@sec.gov. Please include File distribution requirements for certain Number SR–Amex–2007–34 on the Section 107 Securities issued and traded subject line. in thousand dollar denominations and Paper Comments providing an exception to the 400 public shareholder requirement for • Send paper comments in triplicate Section 107 Securities that are to Nancy M. Morris, Secretary, redeemable at the option of the holders Securities and Exchange Commission, thereof on at least a weekly basis. The 100 F Street, NE., Washington, DC Commission believes that these 20549–1090. exceptions are reasonable and should All submissions should refer to File allow for the listing and trading of Number SR–Amex–2007–34. This file certain Section 107 Securities that number should be included on the would otherwise not be able to be listed subject line if e-mail is used. To help the and traded on the Exchange. Commission process and review your The Commission finds good cause for comments more efficiently, please use approving this proposal before the only one method. The Commission will thirtieth day after the publication of post all comments on the Commission’s notice thereof in the Federal Register. Internet Web site (http://www.sec.gov/ The Commission notes that it has rules/sro.shtml). Copies of the previously approved minimum public submission, all subsequent distribution and minimum public amendments, all written statements shareholder requirements that are with respect to the proposed rule substantially similar to Amex’s proposal change that are filed with the and found that such requirements were Commission, and all written consistent with the Act.13 The communications relating to the Commission presently is not aware of proposed rule change between the any regulatory issue that should cause it Commission and any person, other than to revisit that finding or would preclude those that may be withheld from the the application of the proposed public in accordance with the exceptions to the minimum public provisions of 5 U.S.C. 552, will be distribution and minimum public available for inspection and copying in shareholder requirements. Therefore, the Commission’s Public Reference accelerating approval of this proposal Room. Copies of such filing also will be should benefit investors by creating, available for inspection and copying at without undue delay, additional the principal offices of the Exchange. competition in the market for such All comments received will be posted securities. without change; the Commission does not edit personal identifying 11 In approving this rule change, the Commission notes that it has considered the proposed rule’s information from submissions. You impact on efficiency, competition, and capital should submit only information that you wish to make available publicly. All formation. See 15 U.S.C. 78c(f). 12 15 U.S.C. 78f(b)(5). submissions should refer to File 13 See Securities Exchange Act Release No. 55687 Number SR–Amex–2007–34 and should (May 1, 2007), 72 FR 25824 (May 7, 2007) (SR– NYSE–2007–27). be submitted on or before June 6, 2007. cprice-sewell on PROD1PC66 with NOTICES The Exchange has neither solicited nor received written comments on the proposed rule change. VerDate Aug<31>2005 15:27 May 15, 2007 Jkt 211001 PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,14 that the proposed rule change (SR–Amex–2007– 34), as modified by Amendment No.1, be, and it hereby is, approved on an accelerated basis. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.15 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–9364 Filed 5–15–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55734; File No. SR–ISE– 2007–22] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of Proposed Rule Change as Modified by Amendment No. 1 Thereto Relating to Split Prices May 10, 2007. 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 March 26, 2007, the International Securities Exchange, LLC (‘‘ISE’’ 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 substantially prepared by the ISE. On April 20, 2007, the Exchange 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The ISE proposes to amend its rule governing ‘‘Split Prices.’’ Specifically, the Exchange proposes to provide for executions in its Block, Facilitation and Solicitation Mechanisms at half-penny prices for certain options classes included in the penny pilot program.3 The text of the proposed rule change is available at ISE, the Commission’s Public Reference Room, and www.iseoptions.com. 14 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 55161 (January 24, 2007), 72 FR 4754 (February 1, 2007) (SR–ISE–2006–62) (‘‘Penny Pilot Order’’). 15 17 E:\FR\FM\16MYN1.SGM 16MYN1

Agencies

[Federal Register Volume 72, Number 94 (Wednesday, May 16, 2007)]
[Notices]
[Pages 27602-27604]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-9364]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55733; File No. SR-Amex-2007-34]


Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Order Granting Accelerated Approval of Proposed 
Rule Change, as Modified by Amendment No. 1 Thereto, Relating to 
Amendments to Section 107 of the Company Guide

 May 10, 2007.
    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 April 5, 2007, 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 substantially prepared by the Exchange. 
On May 4, 2007, the Exchange filed Amendment No. 1 to the proposed rule 
change. This order provides notice of the proposed rule change, as 
modified by Amendment No. 1, and approves the proposed rule change, as 
amended, on an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend: (1) Sections 107A(b) and 107D(a) of 
the Amex Company Guide to provide an exception to the minimum public 
distribution requirement of one million units for issuances traded in 
thousand dollar denominations, and (2) Sections 107A(b), 107C(a) and 
107D(a) of the Amex Company Guide to provide an exception to the 400 
public shareholder requirement for securities that are redeemable at 
the option of the holders thereof on at least a weekly basis. The text 
of the proposed rule change is available at Amex, the Commission's 
Public Reference Room, and 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, 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 
Statutory Basis for, the Proposed Rule Change

 1. Purpose
    Pursuant to Section 107 of the Amex Company Guide, the Exchange may 
approve for listing and trading securities which cannot be readily 
categorized under the listing criteria for common and preferred 
securities, bonds, debentures, or warrants (``Section 107 
Securities'').\3\ The general listing criteria relating to issuers and 
issuances are set forth in Section 107A of the Company Guide. In 
connection with each potential listing of Section 107 Securities, the 
Exchange evaluates each security and issuance against the following 
criteria in Section 107A (and correspondingly in Sections 107B, 
107C,\4\ 107D, and 107E): (1) A principal amount/aggregate market value 
of $4 million or greater, and (2) a minimum public distribution 
requirement of one million trading units with a minimum of 400 public 
shareholders, except that, if traded in thousand dollar denominations, 
then no minimum number of holders. In addition, the listing criteria 
also requires that the issuer must have assets in excess of $100 
million, stockholders' equity of at least $10 million, and pre-tax 
income of at least $750,000 in the last fiscal year or in two of the 
three prior fiscal years. In the case of an issuer who is unable to 
satisfy the earnings criteria stated in Section 101 of the Company 
Guide, the Exchange will require the issuer to have the following: (a) 
Assets in excess of $200 million and stockholders' equity of

[[Page 27603]]

at least $10 million; or (b) assets in excess of $100 million and 
stockholders' equity of at least $20 million.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 27753 (March 1, 
1990), 55 FR 8626 (March 8, 1990) (SR-Amex-89-29) (approving the 
listing guidelines under Section 107 for new securities not 
otherwise covered under existing sections of the Company Guide).
    \4\ The minimum public distribution requirement for Index-Linked 
Exchangeable Notes set forth in Section 107C of the Amex Company 
Guide is 150,000 notes rather than one million trading units.
---------------------------------------------------------------------------

Minimum Public Distribution

    The first part of the proposal codifies an exception to Sections 
107A(b) and 107D(a) of the Amex Company Guide so that certain issuances 
of Section 107 Securities may be listed even though the minimum public 
distribution requirement of one million units is not met. This 
exception, however, is conditioned on whether or not the issuance is 
traded in thousand dollar denominations. Sections 107A (General 
Criteria) and 107D (Index-Linked Securities) currently require a 
minimum public distribution requirement of one million trading units 
and a minimum of 400 public shareholders, except, if traded in thousand 
dollar denominations, then no minimum number of holders. Amex notes 
that, without the exception to the one million unit minimum public 
distribution requirement, the Exchange would be unable to list certain 
Section 107 Securities in thousand dollar denominations having a market 
value of less than $1 billion. Amex believes the proposed exception to 
be a reasonable accommodation for those issuances in thousand dollar 
denominations. Accordingly, the proposal amends the rule text of 
Section 107A(b) and 107D(a) so that the minimum public distribution and 
minimum public shareholders requirements will not be applicable to an 
issue traded in thousand dollar denominations.

Minimum Public Shareholders

    The purpose of the second part of the proposal is to provide an 
exception to Sections 107A(b), 107C(a), and 107D(a) of the Amex Company 
Guide so that Section 107 Securities may be listed even though there 
may be less than 400 public shareholders at the time of listing.\5\ 
This exception will be conditioned on whether the particular issue 
provides for the redemption of securities at the option of the holders 
on at least a weekly basis. Therefore, the revision to Sections 
107A(b), 107C(a), and 107D(a) will provide that the minimum public 
shareholders requirement will not apply if the securities are 
redeemable at the option of the holders thereof on at least a weekly 
basis.
---------------------------------------------------------------------------

    \5\ A revision to Section 107A(b) of the Amex Company Guide will 
also affect Sections 107B and 107E relating to equity linked term 
notes and trust certificate securities, respectively, because these 
provisions refer to Section 107A for purposes of meeting the 
``General Criteria.''
---------------------------------------------------------------------------

    Over the past several years, the Exchange has added generic listing 
standards in Section 107 of the Company Guide for Equity Linked Term 
Notes, Index-Linked Exchangeable Notes, Index-Linked Securities, and 
Trust Certificate Securities. These requirements are set forth in 
Sections 107B,\6\ 107C, 107D,\7\ and 107E \8\ of the Amex Company 
Guide, respectively. Currently, for each issuance of the foregoing 
Section 107 Securities, there must be a minimum of 400 public 
shareholders, except when the issue is traded in thousand dollar 
denominations. The Exchange submits that an additional exception to the 
400 holder requirement is appropriate for certain securities which 
provide for redemption at the option of the holders on at least a 
weekly basis.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 32343 (May 20, 
1993), 58 FR 30833 (May 27, 1993) (SR-Amex-92-42) (approving the 
listing and trading of Equity Linked Term Notes). See also 
Securities Exchange Act Release No. 47055 (December 19, 2002), 67 FR 
79669 (December 30, 2002) (SR-Amex-2002-110) (increasing the maximum 
number of equity securities permitted to be linked to an Equity 
Linked Term Note); Securities Exchange Act Release No. 42582 (March 
27, 2000), 65 FR 17685 (April 4, 2000) (SR-Amex-99-42) (revising 
Section 107B of the Company Guide).
    \7\ See Securities Exchange Act Release No. 51258 (February 25, 
2005), 70 FR 10700 (March 4, 2005) (SR-Amex-2005-001) (adopting 
generic listing standards for Index-Linked Securities).
    \8\ See Securities Exchange Act Release No. 50355 (September 13, 
2004), 69 FR 56252 (September 20, 2004) (SR-Amex-2004-23) (approving 
generic listing standards for Trust Certificate Securities).
---------------------------------------------------------------------------

    The Exchange believes that a weekly redemption right will ensure a 
strong correlation between the market price of Section 107 Securities 
and the performance of the underlying asset, such as a single security 
or basket of securities and/or securities index, as holders will be 
unlikely to sell their securities for less than their redemption value 
if they have a weekly right to redeem such securities for their full 
value. In addition, in the case of certain Section 107 Securities with 
a weekly redemption feature, the issuer may have the ability to issue 
new securities from time to time at market prices prevailing at the 
time of sale, at prices related to market prices, or at negotiated 
prices. The Exchange believes that this provides a ready supply of new 
securities, thereby reducing the potential that Section 107 Security 
market prices will be affected by a scarcity of available securities. 
In addition, the ability to issue new securities may assist in 
maintaining a strong correlation between the market price and 
indicative value, based largely on potential arbitrage opportunities 
that should mitigate the effect of price differentials.
    Amex believes that the ability to list certain Section 107 
Securities with these characteristics without any specific requirements 
as to the number of holders is important to the successful listing of 
such securities. Issuers issuing these types of Section 107 Securities 
generally do not intend to do so by way of an underwritten offering, 
but instead, initially distribute the securities similar to the manner 
in which exchange-traded funds or ``ETFs'' are brought to market. In 
the case of an ETF, shares are initially launched or distributed 
without a significant distribution event, with the share float 
increasing over time as securities in creation unit size are issued 
from the issuer at net asset value. The Exchange states that, because 
of market dynamics and the purchasing behavior of investors, it is 
difficult for an issuer to be able to guarantee a sufficient number of 
public shareholders or investors on the date of listing in order to 
meet the 400 shareholders requirement. However, the Exchange believes 
that this difficulty in ensuring 400 shareholders on the listing date 
is not indicative of a lack of liquidity and/or adequate distribution 
of the securities. Accordingly, the Exchange submits that the existence 
of a weekly redemption option justifies this limited exception to the 
400 public shareholder requirement.
2. Statutory Basis
    The proposal is consistent with Section 6(b) of the Act,\9\ in 
general, and Section 6(b)(5) of the Act,\10\ in particular, in that it 
is designed 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 facilitating 
transactions in securities, and to remove impediments to, and perfect 
the mechanism of a free and open market and a national market system.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

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

[[Page 27604]]

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. 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-2007-34 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-2007-34. 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 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-2007-34 and should be submitted on or before June 
6, 2007.

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

    After careful review, 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.\11\ In particular, the Commission finds that the proposed 
rule change is consistent with Section 6(b)(5) of the Act,\12\ which 
requires that an exchange have rules designed, among other things, 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. The Commission believes that this proposal should benefit 
investors by providing an exception to the minimum public distribution 
requirements for certain Section 107 Securities issued and traded in 
thousand dollar denominations and providing an exception to the 400 
public shareholder requirement for Section 107 Securities that are 
redeemable at the option of the holders thereof on at least a weekly 
basis. The Commission believes that these exceptions are reasonable and 
should allow for the listing and trading of certain Section 107 
Securities that would otherwise not be able to be listed and traded on 
the Exchange.
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    \11\ In approving this rule change, the Commission notes that it 
has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \12\ 15 U.S.C. 78f(b)(5).
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    The Commission finds good cause for approving this proposal before 
the thirtieth day after the publication of notice thereof in the 
Federal Register. The Commission notes that it has previously approved 
minimum public distribution and minimum public shareholder requirements 
that are substantially similar to Amex's proposal and found that such 
requirements were consistent with the Act.\13\ The Commission presently 
is not aware of any regulatory issue that should cause it to revisit 
that finding or would preclude the application of the proposed 
exceptions to the minimum public distribution and minimum public 
shareholder requirements. Therefore, accelerating approval of this 
proposal should benefit investors by creating, without undue delay, 
additional competition in the market for such securities.
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    \13\ See Securities Exchange Act Release No. 55687 (May 1, 
2007), 72 FR 25824 (May 7, 2007) (SR-NYSE-2007-27).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\14\ that the proposed rule change (SR-Amex-2007-34), as modified 
by Amendment No.1, be, and it hereby is, approved on an accelerated 
basis.
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    \14\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-9364 Filed 5-15-07; 8:45 am]
BILLING CODE 8010-01-P