[Federal Register Volume 67, Number 247 (Tuesday, December 24, 2002)]
[Notices]
[Pages 78529-78531]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-32313]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47007; File No. SR-Amex-2002-103]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the American Stock Exchange 
LLC Relating to Minimum Size of Listing Qualifications Panels

December 16, 2002.
    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 10, 2002, 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 and II below, which Items have been prepared by the Exchange. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change.
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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 Amex proposes to amend Section 1204 (a) of the Amex Company 
Guide to provide that listing and delisting hearings may be conducted 
before a Listing Qualifications Panel comprised of a minimum of two 
rather than three members of the Amex Committee on Securities. Proposed 
new language is italicized; proposed deletions are in [brackets].
* * * * *
Section 1204. The Listing Qualifications Panel
    (a) All hearings will be conducted before a Listing Qualifications 
Panel (``Panel'') comprised of at least [three] two members of the 
Committee on Securities. No person shall serve as a Panel member for a 
matter if his or her interest or the interests of any person in whom he 
or she is directly or indirectly interested will be substantially 
affected by the outcome of the matter. In the event of a tie vote among 
the panel members, the matter will be forwarded to the full Committee 
on Securities for review pursuant to Section 1205.
* * * * *
    (b) Not applicable.
    (c) Not applicable.
* * * * *

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 IV below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant aspects of such 
statements.

[[Page 78530]]

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

1. Purpose
    In May 2002, the Exchange implemented significant changes to the 
appeal process applicable to the review of initial and continued 
listing determinations.\3\ The revised procedures, which are contained 
in Part 12 of the Amex Company Guide, provide issuers with the right to 
appeal a staff determination to a Listing Qualifications Panel 
(``Panel'') comprised of at least three members of the Amex Committee 
on Securities (the ``Committee''). The issuer also has the right to 
appeal an adverse Panel decision to the full Committee.
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    \3\ See Securities Exchange Act Release No. 45898, (May 8, 
2002), 67 GT 34502 (May 14, 2002) (approving File No. SR-Amex-2001-
47).
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    The new procedures have operated relatively smoothly, and provided 
increased transparency and efficiency to the process. However, the Amex 
believes that the requirement that each Panel be comprised of at least 
three-members of the Committee is potentially problematic, in that on 
occasion last-minute scheduling conflicts have developed for Panel 
members who had agreed to participate on a particular hearing date. 
Although in each case that has arisen so far, the Panel member was 
ultimately able to participate, the Exchange is concerned that 
unanticipated conflicts or illness could potentially force the 
rescheduling of a hearing date under circumstances that could be 
disruptive to issuers and to the appeal process. While the Exchange's 
hearings staff does contact additional Committee members to serve as 
``alternates,'' typically these members are released from this 
obligation two or three days prior to the hearing date in order to 
avoid the burden on such members of reviewing the written materials if 
their services will not be needed. The Amex believes it is also not 
optimal to increase the size of Panels to more than three members, in 
that larger Panel sizes would result in appeals to the full Committee 
being decreasingly meaningful.
    Accordingly, the Exchange is proposing that the minimum Panel size 
be reduced from three members of the Committee to two. Because the Amex 
continues to believe that a three-member Panel size is optimal--in 
order to avoid a ``tie'' vote and to provide a broader range of views--
the Exchange's hearings staff will continue to schedule three Committee 
members for each hearing date. Prior to holding a hearing with only two 
Panel members, the hearings staff will consult with the two members, 
and if such Panel members feel that the particular facts and 
circumstances of the appeal in question are such that a two-member 
Panel is not appropriate, then the hearings staff will postpone the 
hearing to a later date.
    While the Amex anticipates that two-member Panels will be used 
infrequently (if ever), the reduction in the minimum Panel size will 
permit hearings to be held in the event of a last-minute scheduling 
conflict or illness. In the event that a two-member Panel was unable to 
agree on a decision, the matter would be forwarded to the full 
Committee for review. The Amex contends that Nasdaq listing 
qualifications panels consist of only two panel members and their 
process appears to operate relatively smoothly.\4\
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    \4\ See NASD Rule 4830(a).
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2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) of the 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 foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, to protect investors and the public interest 
and is not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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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 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 Exchange 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 comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \7\ and Rule 19b-4(f)(6)\8\ thereunder because 
the proposal: (i) Does not significantly affect the protection of 
investors or the public interest; (ii) does not impose any significant 
burden on competition; and (iii) does not become operative prior to 30 
days after the date of filing or such shorter time as the Commission 
may designate if consistent with the protection of investors and the 
public interest. In addition, the Exchange provided the Commission with 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at least 
five business days prior to the date of the filing the proposed rule 
change as required by Rule 19b-4(f)(6). At any time within 60 days of 
the filing of such proposed rule change, the Commission may summarily 
abrogate such rule change if it appears to the Commission that such 
action is necessary or appropriate in the public interest, for the 
protection of investors or otherwise in furtherance of the purposes of 
the Act.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
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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. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. 
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 at the 
Commission's Public Reference Room. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
Exchange. All submissions should refer to File No. SR-Amex-2002-103 and 
should be submitted by January 14, 2003.


[[Page 78531]]


    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-32313 Filed 12-23-02; 8:45 am]
BILLING CODE 8010-01-P