Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of Proposed Rule Change as Modified by Amendments No. 1 and 2 Relating to Independent Directors and Audit Committee Members, 73386-73388 [E7-24987]
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Federal Register / Vol. 72, No. 247 / Thursday, December 27, 2007 / Notices
is 847 hours. The total annual burden is
4,588 hours.
For copies of this proposal, contact
Mary Beth Smith-Toomey on (202) 606–
8358, FAX (202) 418–3251 or via e-mail
to MaryBeth.Smith-Toomey@opm.gov.
Please include a mailing address with
your request.
DATES: Comments on this proposal
should be received within 30 calendar
days from the date of this publication.
ADDRESSES: Send or deliver comments
to—Ronald W. Melton, Deputy Assistant
Director, Retirement Services Group,
Center for Retirement and Insurance
Services, U.S. Office of Personnel
Management, 1900 E Street, NW., Room
3305, Washington, DC 20415–3500, and
Brenda Aguilar, OPM Desk Officer,
Office of Information & Regulatory
Affairs, Office of Management and
Budget, New Executive Office Building,
NW., Room 10235, Washington, DC
20503.
FOR INFORMATION REGARDING
ADMINISTRATIVE COORDINATION—
CONTACT: Cyrus S. Benson, Team
Leader, Publications Team, RIS Support
Services/Support Group, (202) 606–
0623.
U.S. Office of Personnel Management.
Howard Weizmann,
Deputy Director.
[FR Doc. E7–25095 Filed 12–26–07; 8:45 am]
BILLING CODE 6325–38–P
SECURITIES AND EXCHANGE
COMMISSION
Submission for OMB Review;
Comment Request
Upon written request, copies available
from: Securities and Exchange
Commission, Office of Investor
Education and Advocacy,
Washington, DC 20549–0213.
mstockstill on PROD1PC66 with NOTICES
Extensions:
Form 6–K; OMB Control No. 3235–0116,
SEC File No. 270–107.
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget the
request for extension of the previously
approved collection of information
discussed below.
Form 6–K (17 CFR 249.306) elicits
material information from foreign
private issuers of publicly traded
securities promptly after the occurrence
of specified or other important corporate
events so that investors have current
information upon which to base
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investment decisions. The purpose of
Form 6–K is to ensure that U.S.
investors have access to the same
information that foreign investors do
when making investment decisions.
Form 6–K is a public document and all
information provided is mandatory.
Form 6–K takes approximately 8.7 hours
per response and is filed by
approximately 12,022 issuers annually.
We estimate 75% of the 8.7 hours per
response (6.525 hours) is prepared by
the issuer for a total annual reporting
burden of 78,444 hours (6.525 hours per
response × 12,022 responses). The
remaining burden hours are reflected as
a cost to the foreign private issuers.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid
control number.
Written comments regarding the
above information should be directed to
the following persons: (i) Desk Officer
for the Securities and Exchange
Commission, Office of Information and
Regulatory Affairs, Office of
Management and Budget, Room 10102,
New Executive Office Building,
Washington, DC 20503 or send an email to
Alexander_T._Hunt@omb.eop.gov; and
(ii) R. Corey Booth, Director/Chief
Information Officer, Securities and
Exchange Commission, C/O Shirley
Martinson, 6432 General Green Way,
Alexandria, Virginia 22312; or send an
e-mail to: PRA_Mailbox@sec.gov.
Comments must be submitted to OMB
within 30 days of this notice.
Dated: December 17, 2007.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–24996 Filed 12–26–07; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56982; File No. SR–Amex–
2007–79]
Self-Regulatory Organizations;
American Stock Exchange LLC; Notice
of Filing of Proposed Rule Change as
Modified by Amendments No. 1 and 2
Relating to Independent Directors and
Audit Committee Members
December 18, 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
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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September 18, 2007, the American Stock
Exchange LLC (‘‘Amex’’ or ‘‘Exchange’’),
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III below, which Items
have been substantially prepared by
Amex. On November 8, 2007, Amex
submitted Amendment No. 1 to the
proposed rule change.3 On November
16, 2007, Amex submitted Amendment
No. 2 to the proposed rule change.4 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 Exchange proposes to amend
sections 802 and 803 of the Amex
Company Guide (‘‘Company Guide’’) in
order to modify the cure period
available to a listed issuer that loses an
independent director or audit
committee member. In addition, the
Exchange proposes to reorganize
sections 121, 126, 801, 802, 803, 804
and 805 of the Company Guide to
consolidate the provisions related to
independent director and audit
committee requirements.
The text of the proposed rule change
is available at Amex’s Office of the
Secretary, at the Commission’s Public
Reference Room, and on Amex’s Web
site at https://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. 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
Most listed issuers are required to
maintain a majority independent board
and an audit committee comprised of at
least three independent directors who
3 Amendment No. 1 replaced and superseded the
original filing in its entirety.
4 Amendment No. 2 replaced and superseded
Amendment No. 1 in its entirety.
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Federal Register / Vol. 72, No. 247 / Thursday, December 27, 2007 / Notices
meet the general Amex independence
criteria specified in section 121 of the
Company Guide, as well as the audit
committee independence requirements
mandated by Rule 10A–3 under the
Act 5 and section 803 of the Company
Guide. Section 121B(2)(c) of the
Company Guide provides an exemption
for small business issuers (‘‘Small
Business Issuers’’) 6 which states that
Small Business Issuers are only required
to maintain a board of directors
comprised of at least 50% independent
directors and an audit committee of at
least two members, comprised solely of
independent directors who also meet
the requirements of Rule 10A–3 under
the Act.7
Issuers that lose an independent audit
committee member because the director
ceases to be ‘‘independent’’ pursuant to
Rule 10A–3 of the Act 8 or section 121A
of the Company Guide for reasons
outside his or her reasonable control are
afforded a cure period to replace the
director.9 The cure period lasts until the
earlier of the company’s next annual
shareholders’ meeting or one year from
the date of the event that caused the
noncompliance and is based on Rule
10A–3(a)(3) under the Act,10 which
permits an exchange to provide such a
cure period.
Currently, the Company Guide does
not provide an explicit cure period for
a listed issuer that fails to comply with
the audit committee requirements due
to a vacancy on its audit committee.
Further, the Company Guide does not
provide an explicit cure period for a
listed issuer that fails to comply with
the majority independent board
requirements due to a vacancy or if a
director ceases to be independent due to
circumstances beyond his or her
reasonable control. The Exchange
proposes to provide a cure period to
apply to situations in which an issuer
becomes non-compliant with the audit
committee requirements due to a
vacancy 11 or the majority independent
board requirements as a result of either
(i) a vacancy or (ii) if a director ceases
to be independent due to circumstances
beyond his or her reasonable control.12
The proposed rule change would
5 17
CFR 240.10A–3.
‘‘small business issuer’’ is generally defined
as a company whose annual revenue is less than
$25 million and whose ‘‘public float’’ is less than
$25 million. See Item 10(a)(1) of SEC Regulation
S–B (17 CFR 228.10(a)(1)).
7 17 CFR 240.10A–3.
8 Id.
9 See Section 803(a) of the Company Guide.
10 17 CFR 240.10A–3(a)(3).
11 See proposed Section 803B(6)(b) of the
Company Guide.
12 See proposed Section 802(b) of the Company
Guide.
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provide that if the annual shareholders’
meeting occurs no later than 180 days
following the event that caused the
issuer’s failure to comply with the
majority independent board
requirement or the audit committee
composition requirement, the listed
issuer (other than a Small Business
Issuer) will instead have 180 days from
the event to regain compliance.13 The
180-day minimum cure period will help
assure adequate time for companies to
conduct an appropriate search process
for a qualified replacement for an
independent director or audit
committee member.
Currently, the Nasdaq Stock Market,
Inc. (‘‘Nasdaq’’) provides a similar cure
period for its listed issuers with a
vacancy on the board or audit
committee,14 though Nasdaq does not
provide an exemption for Small
Business Issuers. Section 121B(2)(c) of
the Company Guide provides an
exemption for Small Business Issuers in
that they are only required to maintain
a board of directors comprised of at least
50% independent directors, and an
audit committee of at least two
members, comprised solely of
independent directors who also meet
the requirements of Rule 10A–3 under
the Act.15 In the event that a Small
Business Issuer elects to have more than
two members on its audit committee, a
vacancy of one of the audit committee
members will not trigger a violation of
the audit committee requirements under
section 121B(2)(c) of the Company
Guide. If, on the other hand, a Small
Business Issuer decides to have only
two members on its audit committee, it
becomes imperative that a vacancy on
the audit committee be filled as quickly
and efficiently as possible. Thus, in
light of the exemption provided to
Small Business Issuers, Amex proposes
that if the annual shareholders’ meeting
of a Small Business Issuer occurs no
later than 75 days following the event
that caused the failure to comply with
the audit committee composition
requirement, that such Small Business
Issuer have 75 days from the event to
regain compliance.16
Amex also proposes to reorganize
sections 121, 126, 801, 802, 803, 804,
and 805 of the Company Guide to
consolidate the provisions related to
independent director and audit
committee requirements.
13 See
proposed Sections 803B(6)(b) and 802(b) of
the Company Guide.
14 See Nasdaq Rule 4350(d)(4)(B). See also
Securities Exchange Act Release No.
54421(September 11, 2006), 71 FR 54698
(September 18, 2006) (SR–NASDAQ–2006–011).
15 17 CFR 240.10A–3.
16 See proposed Section 803B(6)(b).
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73387
The Exchange believes that the
proposed changes strike an appropriate
balance between the shareholder
protections provided by an independent
board and audit committee and the time
that is generally needed to replace an
independent director and/or audit
committee member. Moreover, the
Exchange expects the use of the explicit
cure period to provide greater
transparency and clarity to the process,
as well as greater uniformity with the
corporate governance standards of other
national securities exchanges.
2. Statutory Basis
The proposed rule change is
consistent with section 6(b) of the Act,17
in general, and furthers the objectives of
section 6(b)(5) of the Act,18 in
particular, in that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and to protect investors
and the public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The proposed rule change will impose
no 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
No written comments were solicited
or received by the Exchange on this
proposal.
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.
17 15
18 15
E:\FR\FM\27DEN1.SGM
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
27DEN1
73388
Federal Register / Vol. 72, No. 247 / Thursday, December 27, 2007 / Notices
Comments may be submitted by any of
the following methods:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–56985; File No. SR–
NASDAQ–2007–098]
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–Amex–2007–79 on the
subject line.
Paper Comments
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Order Granting Accelerated
Approval of Proposed Rule Change
Relating to the Trading of Certain
Securities Outside of the Regular
Market Session
December 18, 2007.
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
mstockstill on PROD1PC66 with NOTICES
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 December
7, 2007, The NASDAQ Stock Market
LLC (‘‘NASDAQ’’ or ‘‘Exchange’’) filed
All submissions should refer to File
with the Securities and Exchange
Number SR–Amex–2007–79. This file
Commission (‘‘Commission’’) the
number should be included on the
proposed rule change as described in
subject line if e-mail is used. To help the Items I and II below, which items have
Commission process and review your
been substantially prepared by the
comments more efficiently, please use
Exchange. This order provides notice of
only one method. The Commission will and approves the proposed rule change
post all comments on the Commission’s on an accelerated basis.
Internet Web site (https://www.sec.gov/
I. Self-Regulatory Organization’s
rules/sro.shtml). Copies of the
Statement of the Terms of Substance of
submission, all subsequent
the Proposed Rule Change
amendments, all written statements
with respect to the proposed rule
The Exchange proposes to: (1) Amend
change that are filed with the
NASDAQ Rules 4420(i), 4420(j), and
Commission, and all written
4630 to permit the trading of Portfolio
communications relating to the
Depository Receipts, Index Fund Shares,
proposed rule change between the
and Commodity-Related Securities
Commission and any person, other than (collectively, ‘‘ETFs’’), respectively,
those that may be withheld from the
during NASDAQ’s Pre- and Post-Market
public in accordance with the
Sessions; 3 (2) add new NASDAQ Rule
provisions of 5 U.S.C. 552, will be
4631, which would require certain
available for inspection and copying in
disclosures to be made by members to
the Commission’s Public Reference
their non-member customers prior to
Room, 100 F Street, NE., Washington,
accepting orders for trading as a result
DC 20549, on official business days
of the proposed extended trading hours
between the hours of 10 a.m. and 3 p.m. for ETFs; (3) allow certain ETFs
Copies of such filing also will be
currently approved for trading on the
available for inspection and copying at
Exchange pursuant to unlisted trading
the principal office of the Amex. All
privileges (‘‘UTP’’) to trade during
comments received will be posted
NASDAQ’s Pre- and Post-Market
without change; the Commission does
Sessions; and (4) make certain technical,
not edit personal identifying
clarifying changes to NASDAQ Rules
information from submissions. You
4420(i) and 4420(j) relating to the
should submit only information that
dissemination of the underlying index
you wish to make available publicly. All value with respect to Non-US
submissions should refer to File
Component Stocks 4 included in the
Number SR–Amex–2007–79 and should
1 15 U.S.C. 78s(b)(1).
be submitted on or before January 17,
2 17 CFR 240.19b–4.
2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–24987 Filed 12–26–07; 8:45 am]
BILLING CODE 8011–01–P
19 17
CFR 200.30–3(a)(12).
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3 NASDAQ defines the Pre-Market Session as the
trading session that begins at 7 a.m. and continues
until 9:30 a.m. The Post-Market Session means the
trading session that begins at 4 p.m. or 4:15 p.m.
and continues until 8 p.m. The Regular Market
Session means the trading session from 9:30 a.m.
until 4 p.m. or 4:15 p.m. See NASDAQ Rule
4120(b)(4).
4 Non-US Component Stocks are equity securities
that: (1) Are not registered under Sections 12(a) or
12(g) of the Act (15 U.S.C. 78l(a) and 15 U.S. 78l(g));
(2) are issued by an entity that is not organized,
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index. The text of the proposed rule
change is available at the Exchange’s
principal office, the Commission’s
Public Reference Room, and https://
nasdaq.complinet.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
NASDAQ states that its members
currently trade a wide variety of ETFs
on the Exchange pursuant to UTP in
accordance with NASDAQ Rules
4420(i), 4420(j), and 4630 and has
confined member trading in such ETFs
to only the Exchange’s Regular Market
Session. This trading restriction is
premised on the unavailability of an
updated current index value and/or
Intraday Indicative Value 5 during the
Pre- and Post-Market Sessions. Under
the proposal, NASDAQ seeks to permit
trading in ETFs during the Pre-Market
and Post-Market Sessions, provided that
its members provide non-members
certain pre-trade disclosures prior to
accepting non-member orders in such
ETFs. Accordingly, the Exchange
proposes to amend NASDAQ Rules
4420(i), 4420(j), and 4630 to allow
members to trade ETFs during all three
Market Sessions and limit the hours
during which the dissemination of
applicable current index values and
updated Intraday Indicative Values 6 are
required. Because the applicable current
domiciled, or incorporated in the United States; and
(3) are issued by an entity that is an operating
company (including Real Estate Investment Trusts
and income trusts, but excluding investment trusts,
unit trusts, mutual funds, and derivatives). See
NASDAQ Rules 4420(i)(1)(D) and 4420(j)(1)(D).
5 The Intraday Indicative Value is also sometimes
referred to as the Indicative Optimized Portfolio
Value, the Indicative Fund Value, the Indicative
Trust Value, and the Indicative Partnership Value,
depending on the type of ETF being traded and the
terminology used.
6 See NASDAQ Rules 4420(i)(3)(C) and
4420(j)(3)(C) (describing the Intraday Indicative
Value and its dissemination requirements).
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]]>Agencies
[Federal Register Volume 72, Number 247 (Thursday, December 27, 2007)]
[Notices]
[Pages 73386-73388]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-24987]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56982; File No. SR-Amex-2007-79]
Self-Regulatory Organizations; American Stock Exchange LLC;
Notice of Filing of Proposed Rule Change as Modified by Amendments No.
1 and 2 Relating to Independent Directors and Audit Committee Members
December 18, 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 September 18, 2007, the American Stock Exchange LLC (``Amex'' or
``Exchange''), filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been substantially
prepared by Amex. On November 8, 2007, Amex submitted Amendment No. 1
to the proposed rule change.\3\ On November 16, 2007, Amex submitted
Amendment No. 2 to the proposed rule change.\4\ The Commission is
publishing this notice to solicit comments on the proposed rule change,
as amended, from interested persons.
---------------------------------------------------------------------------
\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.
\4\ Amendment No. 2 replaced and superseded Amendment No. 1 in
its entirety.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend sections 802 and 803 of the Amex
Company Guide (``Company Guide'') in order to modify the cure period
available to a listed issuer that loses an independent director or
audit committee member. In addition, the Exchange proposes to
reorganize sections 121, 126, 801, 802, 803, 804 and 805 of the Company
Guide to consolidate the provisions related to independent director and
audit committee requirements.
The text of the proposed rule change is available at Amex's Office
of the Secretary, at the Commission's Public Reference Room, and on
Amex's Web site at https://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. 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
Most listed issuers are required to maintain a majority independent
board and an audit committee comprised of at least three independent
directors who
[[Page 73387]]
meet the general Amex independence criteria specified in section 121 of
the Company Guide, as well as the audit committee independence
requirements mandated by Rule 10A-3 under the Act \5\ and section 803
of the Company Guide. Section 121B(2)(c) of the Company Guide provides
an exemption for small business issuers (``Small Business Issuers'')
\6\ which states that Small Business Issuers are only required to
maintain a board of directors comprised of at least 50% independent
directors and an audit committee of at least two members, comprised
solely of independent directors who also meet the requirements of Rule
10A-3 under the Act.\7\
---------------------------------------------------------------------------
\5\ 17 CFR 240.10A-3.
\6\ A ``small business issuer'' is generally defined as a
company whose annual revenue is less than $25 million and whose
``public float'' is less than $25 million. See Item 10(a)(1) of SEC
Regulation S-B (17 CFR 228.10(a)(1)).
\7\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------
Issuers that lose an independent audit committee member because the
director ceases to be ``independent'' pursuant to Rule 10A-3 of the Act
\8 \or section 121A of the Company Guide for reasons outside his or her
reasonable control are afforded a cure period to replace the
director.\9\ The cure period lasts until the earlier of the company's
next annual shareholders' meeting or one year from the date of the
event that caused the noncompliance and is based on Rule 10A-3(a)(3)
under the Act,\10\ which permits an exchange to provide such a cure
period.
---------------------------------------------------------------------------
\8\ Id.
\9\ See Section 803(a) of the Company Guide.
\10\ 17 CFR 240.10A-3(a)(3).
---------------------------------------------------------------------------
Currently, the Company Guide does not provide an explicit cure
period for a listed issuer that fails to comply with the audit
committee requirements due to a vacancy on its audit committee.
Further, the Company Guide does not provide an explicit cure period for
a listed issuer that fails to comply with the majority independent
board requirements due to a vacancy or if a director ceases to be
independent due to circumstances beyond his or her reasonable control.
The Exchange proposes to provide a cure period to apply to situations
in which an issuer becomes non-compliant with the audit committee
requirements due to a vacancy \11\ or the majority independent board
requirements as a result of either (i) a vacancy or (ii) if a director
ceases to be independent due to circumstances beyond his or her
reasonable control.\12\ The proposed rule change would provide that if
the annual shareholders' meeting occurs no later than 180 days
following the event that caused the issuer's failure to comply with the
majority independent board requirement or the audit committee
composition requirement, the listed issuer (other than a Small Business
Issuer) will instead have 180 days from the event to regain
compliance.\13\ The 180-day minimum cure period will help assure
adequate time for companies to conduct an appropriate search process
for a qualified replacement for an independent director or audit
committee member.
---------------------------------------------------------------------------
\11\ See proposed Section 803B(6)(b) of the Company Guide.
\12\ See proposed Section 802(b) of the Company Guide.
\13\ See proposed Sections 803B(6)(b) and 802(b) of the Company
Guide.
---------------------------------------------------------------------------
Currently, the Nasdaq Stock Market, Inc. (``Nasdaq'') provides a
similar cure period for its listed issuers with a vacancy on the board
or audit committee,\14\ though Nasdaq does not provide an exemption for
Small Business Issuers. Section 121B(2)(c) of the Company Guide
provides an exemption for Small Business Issuers in that they are only
required to maintain a board of directors comprised of at least 50%
independent directors, and an audit committee of at least two members,
comprised solely of independent directors who also meet the
requirements of Rule 10A-3 under the Act.\15\ In the event that a Small
Business Issuer elects to have more than two members on its audit
committee, a vacancy of one of the audit committee members will not
trigger a violation of the audit committee requirements under section
121B(2)(c) of the Company Guide. If, on the other hand, a Small
Business Issuer decides to have only two members on its audit
committee, it becomes imperative that a vacancy on the audit committee
be filled as quickly and efficiently as possible. Thus, in light of the
exemption provided to Small Business Issuers, Amex proposes that if the
annual shareholders' meeting of a Small Business Issuer occurs no later
than 75 days following the event that caused the failure to comply with
the audit committee composition requirement, that such Small Business
Issuer have 75 days from the event to regain compliance.\16\
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\14\ See Nasdaq Rule 4350(d)(4)(B). See also Securities Exchange
Act Release No. 54421(September 11, 2006), 71 FR 54698 (September
18, 2006) (SR-NASDAQ-2006-011).
\15\ 17 CFR 240.10A-3.
\16\ See proposed Section 803B(6)(b).
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Amex also proposes to reorganize sections 121, 126, 801, 802, 803,
804, and 805 of the Company Guide to consolidate the provisions related
to independent director and audit committee requirements.
The Exchange believes that the proposed changes strike an
appropriate balance between the shareholder protections provided by an
independent board and audit committee and the time that is generally
needed to replace an independent director and/or audit committee
member. Moreover, the Exchange expects the use of the explicit cure
period to provide greater transparency and clarity to the process, as
well as greater uniformity with the corporate governance standards of
other national securities exchanges.
2. Statutory Basis
The proposed rule change is consistent with section 6(b) of the
Act,\17\ in general, and furthers the objectives of section 6(b)(5) of
the Act,\18\ in particular, in that it is designed to promote just and
equitable principles of trade, to remove impediments to and perfect the
mechanism of a free and open market and to protect investors and the
public interest.
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\17\ 15 U.S.C. 78f(b).
\18\ 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 will impose no 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
No written comments were solicited or received by the Exchange on
this proposal.
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.
[[Page 73388]]
Comments may be submitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-Amex-2007-79 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-2007-79. 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 (https://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 the 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-2007-79 and should be
submitted on or before January 17, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-24987 Filed 12-26-07; 8:45 am]
BILLING CODE 8011-01-P
