[Federal Register Volume 65, Number 225 (Tuesday, November 21, 2000)]
[Notices]
[Pages 69976-69977]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-29710]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-43559; File No. SR-Amex-00-43]
Self-Regulatory Organizations; Order Approving Proposed Rule
Change by the American Stock Exchange LLC Amending Its Rules To Require
Companies To Publicly Disclose Receipt of a Delisting Notice
November 14, 2000.
I. Introduction
On August 16, 2000, 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''),\1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend its rules to require companies to
publicly disclose receipt of a written delisting notice from the
Exchange. On September 26, 2000, the Amex submitted Amendment No. 1 to
the proposal to make certain technical modifications.\3\
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See letter from Michael J. Ryan, Senior Vice President,
Chief of Staff, and Senior Legal Officer, Amex, to Alton Harvey,
Office Chief, Division of Market Regulation, Commission, dated
September 20, 2000.
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[[Page 69977]]
The proposed rule change was published for comment in the Federal
Register on October 5, 2000.\4\ No comments were received. This order
approves the proposed rule change.
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\4\ Securities Exchange Act Release No. 43371 (Sept. 27, 2000),
65 FR 59476.
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II. Description of the Proposal
The Exchange has had a policy of requiring a company whose
securities are listed on the Exchange (or trade on the Exchange
pursuant to unlisted trading privileges) to publicly disclose receipt
from the Exchange of a written delisting notice for failure to comply
with the Exchange's continued listing guidelines. The purpose of the
proposed rule change is to codify this policy in order to protect
present and potential investors in the securities of a company in
receipt of such notice.
In order to provide investors with the greatest protection
possible, the Exchange believes that a company's public announcement of
its pending delisting should disclose not only the fact of the
company's having received a written notice from the Exchange, but also
indicate on which of the Amex continued listing guidelines the
determination to delist has been based. The Exchange believes that
requiring companies to disclose to investors which specific listing
guideline(s) a company has failed to meet will better enable investors
to make informed decisions about whether to make or maintain
investments in the securities of such company.
The Exchange has proposed that a company make public its
announcement regarding its pending delisting as promptly as possible,
but not more than seven calendar days following its receipt of the
written delisting notice from the Exchange. The Amex believes that the
proposed seven-day time frame is consistent with its current policy and
that such time frame would provide the subject company with sufficient
opportunity to prepare its public announcement and also ensure that
investors receive the information in a timely manner. If a company
should fail to disclose the receipt of a written delisting notice under
the Exchange's proposal, trading of its securities would be halted
until the announcement has been made, even if the company elects to
appeal the underlying delisting determination as provided for under
Section 1010 of the Exchange's Listing Standards, Policies and
Requirements.
The Exchange has also proposed that, where a company has elected to
appeal the Exchange's delisting determination but fails to make the
required announcement before the Adjudicatory Council issues its
decision with regard to the company's appeal, such decision by the
Adjudicatory Council whether or not to delist the company's securities
may also be based on the company's failure to make the required public
announcement.
III. Discussion
After careful review, the Commission finds that the proposed rule
change is consistent with the Act and the rules and regulations
thereunder governing national securities exchanges.\5\ In particular,
the Commission finds that the proposal is consistent with the
provisions of Section 6(b)(5) of the Act \6\ which requires, among
other things, that an exchange have rules that are, in general,
designed to protect investors and the public interest. The Commission
finds that it is appropriate for the Amex to codify in its rules its
current policy requiring a listed company (or a company whose
securities trade on the Exchange pursuant to unlisted trading
privileges) to promptly disclose to the public that it has received a
written delisting notice from the Exchange, and to set forth in its
public disclosure the continued listing guidelines cited by the
Exchange in making its delisting determination. The proposed rule
change will better enable the Exchange to ensure that investors in the
securities traded on the Exchange have as much information as possible
about the issuers of such securities.
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\5\ In approving this rule change, the Commission has considered
its impact on efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
\6\ 15 U.S.C. 78f(b)(5).
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It is Therefore Ordered, pursuant to Section 19(b)(2) of the
Act,\7\ that the proposed rule change (SR-Amex-00-43) is hereby
approved.
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\7\ 15 U.S.C. 78s(b)(2).
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For the Commission, by the Division of Market Regulation, pursuant
to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-29710 Filed 11-20-00; 8:45 am]
BILLING CODE 8010-01-M