I. Introduction
On December 6, 2001, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) and Rule 19b-4 thereunder, a proposed rule change to amend sections 140, 141, 142, 144 and 341 of the Amex Company Guide relating to the Exchange's initial listing fee, annual fee, the fee for listing additional shares and a one-time charge for listing shares issued in connection with the acquisition of a listed company by an unlisted company. The Exchange filed Amendment No. 1 to the proposed rule change on December 26, 2001. The Exchange filed Amendment No. 2 to the proposed rule change on December 26, 2001. The Exchange filed Amendment No. 3 to the proposed rule change on January 5, 2002. The proposed rule change, as amended by Amendments Nos. 1 and 2, was published for comment in the Federal Register on January 10, 2002. No comments were received regarding the proposed rule change, as amended. This order approves the proposed rule change, as amended, on an accelerated basis.
17 CFR 240.19b-4.
See letter from Michael J. Ryan, Executive Vice President and General Counsel, Amex, to Nancy Sanow, Assistant Director, Division of Market Regulation (“Division”), Commission, dated December 13, 2001 (“Amendment No. 1”). In Amendment No. 1, the Amex requested that Commission grant accelerated approval to the proposed rule change.
See letter from Michael J. Ryan, Executive Vice President and General Counsel, Amex, to Marc McKayle, Special Counsel, Division, Commission, dated December 20, 2001 (“Amendment No. 2”). In Amendment No. 2, the Amex stated that it seeks to implement the revised Annual Fee schedule under section 141 as of January 1, 2002 and the revisions to sections 140, 142, 144 and 341 upon Commission approval. In addition, the Amex made a minor correction to the proposed rule change, clarified that it will not reimburse part of the annual fee paid under section 141 to issuers whose securities are removed from listing and registration for the portion of the year remaining after the date of removal, and added additional reasons for amending the Refund of Listing Fees under section 144.
See letter from Michael Cavalier, Associate General Counsel, Amex, to Christopher Solgan, Law Clerk, Division, Commission, dated January 4, 2002 (“Amendment No. 3”). In Amendment No. 3, the Amex made a minor correction to the text of the proposed rule change. This is a technical amendment and is not subject to notice and comment.
See Securities Exchange Act Release No. 45235 (January 4, 2002), 67 FR 1373.
II. Description of the Proposed Rule Change
The Exchange proposes to amend sections 140, 141, 142, 144 and 341 of the Amex Company Guide to modify initial and annual listing fees, fees for listing additional shares and the one-time charge for listing shares issued in connection with the acquisition of a listed company by an unlisted company.
Specifically, the Exchange proposes to amend section 140 of the Company Guide by increasing the original listing fees for stock issues, excluding securities listed under sections 106 (Currency and Index Warrants) and 107 (Other Securities) of the Company Guide. The Exchange also proposes that the one time-charge of $5,000 for issuers who do not have a stock or warrant issue listed on the Exchange would now be designated an application processing fee. The original listing fee for Index Fund Shares (e.g., iShares, VIPERs) listed under Rule 1000A and Trust Issued Receipts (e.g., HOLDRs) listed under Rule 1200 is $5000 for each series, with no application processing fee.
The Exchange proposes to amend section 141 of the Company Guide by increasing annual fees for stock issues and for issues listed under sections 106 and 107 of the Company Guide. In addition, the Exchange proposes to codify an existing procedure in section 141 of the Company Guide to provide that the annual fee for Index Fund Shares and Trust Issued Receipts is based on the number of shares of a series outstanding at year-end, with multiple series aggregated for purposes of the fee calculation. Finally, the Exchange proposes that it would no longer reimburse issuers whose securities are removed from Exchange listing for part of any previously paid annual fee applicable to the portion of the year remaining after the date of suspension from dealings.
For issues over 100,000 shares, the Exchange proposes to amend section 142 of the Company Guide to increase the maximum fee per company for listing additional shares to $22,500 for issues of 1,125,000 shares or more. In addition, the Exchange proposes a maximum fee per company in any one year for listing additional shares of $45,000. Section 142(a) of the Company Guide would also be amended to make clear that section 142 fees apply to Amex securities admitted to unlisted trading privileges (i.e., the relatively few Amex-traded issues grandfathered under section 12 of the Act and not required to execute a listing agreement with the Exchange), comparable to the provision in section 141 of the Company Guide for annual fees.
15 U.S.C. 78 1.
The Exchange proposes to amend section 142(d) of the Company Guide (“Substitution Listing”) by raising the fee for listing of new substituted shares from $2,500 to $5,000, and raising the maximum fee for substituted shares and excess shares from $20,000 to $27,500 per quarter, (corresponding to the sum of the proposed $5,000 increase in maximum fees for listing additional shares under section 142(a) of the Company Guide and the $2,500 fee increase for listing new substituted shares).
The Exchange proposes to increase the service charge under section 144 of the Company Guide to $1,500 for applicants that withdraw their applications or for applications that are not approved. In addition the Exchange proposes to increase the minimum charge if an issuer cancels a listing authorization without issuing such authorized shares from $1,000 to $1,500.
Lastly, the Exchange proposes to amend section 341 of the Company Guide to increase the one-time charge imposed in connection with acquisition of a listed company by an unlisted company from $7,500 to $10,000.
III. Discussion
The Commission finds that the proposed rule change, as amended, is consistent with the requirements of section 6 of the Act and the rules and regulations thereunder applicable to a national securities exchange. The Commission finds specifically that the proposed rule change is consistent with section 6(b)(4) of the Act, which requires, among other things, that the rules of a national securities exchange be designed to provide for the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities. Specifically, the increase reflects additional costs that the Exchange has represented it incurs for services provided to issuers. As represented by the Exchange, it has incurred significantly increased regulatory and technology costs over the last several years. In addition, the Exchange stated that the proposed fee increases are necessary to adequately fund the Exchange's listed equities business and development of value-added services for Amex-listed companies and to allow it to relieve pressures on other revenue sources that have traditionally underwritten short falls in regulatory related fees.
15 U.S.C. 78f.
In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
15 U.S.C. 78f(b)(4).
See Amendment No. 1, supra note 3.
The Exchange seeks to implement the proposed annual fees set forth in section 141 of the Company Guide as of January 1, 2002. The Commission believes that it is reasonable for the Amex to implement these annual fee increases as of January 1, 2002. As noted above, the Exchange stated that it had incurred increased costs over the last several years and has not increased its annual fees for listing since 1993.
The Commission finds good cause for approving the proposed rule change, as amended, prior to the thirtieth day after publication in the Federal Register. The Commission notes that the proposed rule change and Amendment Nos. 1 and 2 were noticed for the full 21-day comment period and the Commission received no comments regarding the proposed rule change, as amended. The Commission believes that granting accelerated approval to the proposed rule change will permit the Exchange to implement the new annual fees as of January 1, 2002, and other fees as of the date of this Order, therefore allowing it to adequately fund its listed equities business and issuer services. Accordingly, the Commission finds good cause, consistent with section 19(b)(2) of the Act to approve the proposed rule change, as amended, on an accelerated basis.
IV. Conclusion
For the foregoing reasons, the Commission finds that the proposal, as amended, is consistent with the requirements of the Act and rules and regulations thereunder.
It is therefore ordered, pursuant to section 19(b)(2) of the Act, that the proposed rule change (SR-Amex-2001-100), as amended, is approved on an accelerated basis.
Id.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-3301 Filed 2-11-02; 8:45 am]
BILLING CODE 8010-01-P