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13542 Federal Register / Vol. 72, No.

55 / Thursday, March 22, 2007 / Notices

comments received will be posted I. Self-Regulatory Organization’s entity attempts to obtain an Amex
without change; the Commission does Statement of the Terms of Substance of listing. Both the New York Stock
not edit personal identifying the Proposed Rule Change Exchange LLC (‘‘NYSE’’) 4 and Nasdaq 5
information from submissions. You The Exchange proposes to amend (i) have comparable provisions.
should submit only information that Section 341 of the Amex Company Many Reverse Mergers are entered
you wish to make available publicly. All Guide to clarify the circumstances into for bona fide business reasons,
submissions should refer to File under which a listed issuer will be however, in some cases listed issuers
Number SR–Amex–2006–114 and deemed to have engaged in a reverse that are not in compliance with the
should be submitted on or before April merger thereby requiring the post- continued listing standards, and face
12, 2007. transaction entity to satisfy the initial potential delisting, attempt to enter into
listing standards and the process a listed Reverse Mergers with private entities in
For the Commission, by the Division of order to retain their Amex listing. In
issuer must follow when applying for
Market Regulation, pursuant to delegated other situations, a listed issuer may be
initial listing in connection with a
authority.8 in compliance with the continued
reverse merger and (ii) Section 713 of
Florence E. Harmon, the Amex Company Guide to require listing standards but the post-
Deputy Secretary. shareholder approval in connection transaction entity would not satisfy the
[FR Doc. E7–5205 Filed 3–21–07; 8:45 am] with the issuance or potential issuance initial listing standards. In both of these
BILLING CODE 8010–01–P of additional listed securities that will cases, a change of control occurs but the
result in a change of control of a listed listed issuer attempts to structure the
issuer. transaction so that it will not be deemed
SECURITIES AND EXCHANGE The text of the proposed rule change a Reverse Merger under the current rule.
COMMISSION is available on the Amex’s Web site at The Exchange proposes amending, the Office of the Section 341 to provide greater clarity
Secretary, the Amex and at the and transparency as to (i) what
[Release No. 34–55477; File No. SR–Amex– constitutes a Reverse Merger, (ii) the
2006–99] Commission’s Public Reference Room.
factors the Exchange will consider in
II. Self-Regulatory Organization’s determining whether a transaction or
Self-Regulatory Organizations; Statement of the Purpose of, and series of transactions constitute(s) a
American Stock Exchange LLC; Notice Statutory Basis for, the Proposed Rule Reverse Merger, (iii) the consequences
of Filing of Proposed Rule Change and Change of entering into a Reverse Merger and
Amendment No. 1 Thereto Relating to In its filing with the Commission, the (iv) the process a listed issuer must
Reverse Mergers Exchange included statements follow in connection with a Reverse
March 15, 2007. concerning the purpose of and basis for Merger. The proposed rule change will
the proposed rule change and discussed provide that, in addition to meeting the
Pursuant to Section 19(b)(1) of the any comments it received on the initial listing standards, a listed
Securities Exchange Act of 1934, as proposed rule change. The text of these company entering into a Reverse Merger
amended (the ‘‘Act’’) 1 and Rule 19b–4 statements may be examined at the will need to obtain shareholder
thereunder,2 notice is hereby given that places specified in Item IV below. The approval in accordance with Section
on October 5, 2006, the American Stock Exchange has prepared summaries, set 713 in order to issue additional listed
Exchange LLC (the ‘‘Amex’’ or the forth in sections A, B, and C below, of securities in connection with such
‘‘Exchange’’) filed with the Securities the most significant aspects of such Reverse Merger. In addition, while the
and Exchange Commission statements. determination of whether a Reverse
(‘‘Commission’’) the proposed rule Merger has occurred or will occur is to
A. Self-Regulatory Organization’s
change as described in Items I, II, and some degree subjective, the Exchange
Statement of the Purpose of, and the
III below, which Items have been proposes to amend Section 341 to more
Statutory Basis for, the Proposed Rule
prepared by the Exchange. On February clearly delineate the factors that will be
14, 2007, the Exchange filed considered by the Exchange in its
Amendment No. 1 to the proposed rule 1. Purpose analysis of a transaction.6
change.3 The Commission is publishing Section 341 of the Amex Company With regards to the process to be
this notice to solicit comments on the Guide currently provides that if an followed by listed issuers in connection
proposed rule change, as amended, from issuer listed on the Amex engages in with Reverse Mergers, Section 341
interested persons. any plan of acquisition, merger or 4 Section 703.08(E) of the NYSE Listed Company
consolidation, the net effect of which is Manual.
8 17 CFR 200.30–3(a)(12). that the listed issuer is acquired by an 5 Nasdaq Rule 4340(a).
1 15 U.S.C. 78s(b)(1). unlisted entity, even if the listed issuer 6 The Exchange’s proposed Section 341 states that
2 17 CFR 240.19b–4.
is the nominal survivor, the post- a ‘‘Reverse Merger’’ is: ‘‘any plan of acquisition,
3 Amendment No. 1 makes revisions to the merger or consolidation whereby a listed company
transaction entity is required to satisfy
proposed rule text, including revisions conforming combines with, or into, a company not listed on the
the proposed rule text to a filing submitted by The
the initial listing standards. Such Exchange, resulting in a change of control of the
NASDAQ Stock Market LLC (‘‘Nasdaq’’) and transactions are typically referred to as listed company and potentially allowing such
approved by the Commission in the period ‘‘Reverse Mergers.’’ Because the issuer unlisted company to obtain an Exchange listing. In
following submission of the original filing resulting from a Reverse Merger is determining whether a change of control constitutes
(Securities Exchange Act Release No. 55052 a Reverse Merger, the Exchange will consider all
(January 5, 2007), 72 FR 1569 (January 12, 2007)
essentially a different entity from the relevant factors, including, but not limited to,
listed issuer, Section 341 does not
rwilkins on PROD1PC63 with NOTICES

(SR–NASDAQ–2006–047)) and revisions changes in the management, board of directors,

incorporating an immediately effective filing permit the post-transaction entity to voting power, ownership, and financial structure of
submitted by Amex in the same period (Securities remain listed on the Amex unless it the listed company. The Exchange will also
Exchange Act Release No. 55096 (January 12, 2007), consider the nature of the businesses and the
72 FR 2563 (January 19, 2007) (SR–Amex–2007–
qualifies as a new listing. This relative size of both the listed and the unlisted
03)). Amendment No. 1 replaces and supersedes the prohibition is intended to prevent ‘‘back companies.’’ See proposed Section 341 of the Amex
original filing in its entirety. door listings’’ whereby an unqualified Company Guide.

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Federal Register / Vol. 72, No. 55 / Thursday, March 22, 2007 / Notices 13543

currently recommends that listed 2. Statutory Basis • Send an e-mail to

issuers submit any proposed plan which The proposed rule change is Please include
could constitute a Reverse Merger to the consistent with Section 6(b) of the File Number SR–Amex–2006–99 on the
Exchange for an informal opinion prior Act,10 in general, and furthers the subject line.
to the plan’s promulgation. The intent of objectives of Section 6(b)(5) of the Act,11 Paper Comments
such provision is to permit Exchange in particular, in that it is designed to
staff to review the proposed transaction prevent fraudulent and manipulative • Send paper comments in triplicate
in order to determine if it constitutes a acts and practices, to promote just and to Nancy M. Morris, Secretary,
Reverse Merger and, in the case of a equitable principles of trade, to remove Securities and Exchange Commission,
Reverse Merger, to review the post- impediments to and perfect the 100 F Street, NE., Washington, DC
transaction entity in order to confirm mechanism of a free and open market 20549–1090.
that it will meet initial listing standards. and a national market system, and, in
The Exchange proposes to make such general, to protect investors and the All submissions should refer to File
process more transparent by requiring a public interest. Number SR–Amex–2006–99. This file
listed issuer to submit an initial listing number should be included on the
B. Self-Regulatory Organization’s subject line if e-mail is used. To help the
application with sufficient time to Statement on Burden on Competition
permit the Exchange to complete its Commission process and review your
review of the post-transaction entity and The proposed rule change does not comments more efficiently, please use
providing that delisting proceedings impose any burden on competition that only one method. The Commission will
will be commenced if such initial listing is not necessary or appropriate in post all comments on the Commission’s
application has not been approved prior furtherance of the purposes of the Act. Internet Web site (
Instead, the Exchange believes that the rules/sro.shtml). Copies of the
to consummation of the Reverse Merger.
proposed rule change will promote submission, all subsequent
The Commission approved a similar
greater uniformity with the listing amendments, all written statements
rule change filed by Nasdaq.7
standards of other markets. with respect to the proposed rule
In association with the proposed change that are filed with the
changes to Section 341, the Exchange C. Self-Regulatory Organization’s
Statement on Comments on the Commission, and all written
also proposes to amend Section 713. communications relating to the
Proposed Rule Change Received From
Section 713 currently requires proposed rule change between the
Members, Participants or Others
shareholder approval as a prerequisite Commission and any person, other than
to Exchange approval of applications to No written comments were solicited
those that may be withheld from the
list additional shares issued in or received with respect to the proposed
public in accordance with the
connection with a transaction (other rule change.
provisions of 5 U.S.C. 552, will be
than a public offering) which would III. Date of Effectiveness of the available for inspection and copying in
involve the application of the initial Proposed Rule Change and Timing for the Commission’s Public Reference
listing standards as described in Section Commission Action Room. Copies of such filing also will be
341. The Exchange proposes revising available for inspection and copying at
Within 35 days of the date of
Section 713 to require shareholder the principal office of the Amex. All
publication of this notice in the Federal
approval as a prerequisite to Exchange comments received will be posted
Register or within such longer period (i)
approval of additional listing without change; the Commission does
as the Commission may designate up to
applications when the issuance or 90 days of such date if it finds such not edit personal identifying
potential issuance of additional longer period to be appropriate and information from submissions. You
securities will result in a change of publishes its reasons for so finding or should submit only information that
control of a listed issuer, regardless of (ii) as to which the Exchange consents, you wish to make available publicly. All
whether such change of control also the Commission will: submissions should refer to File
constitutes a Reverse Merger. (A) By order approve such proposed Number SR–Amex–2006–99 and should
Additionally, the Exchange proposes rule change, or be submitted on or before April 12,
changes to Sections 341 and 713 to (B) Institute proceedings to determine 2007.
clarify the relationship between their whether the proposed rule change
respective requirements. Both NYSE 8 For the Commission by the Division of
should be disapproved.
and Nasdaq 9 require shareholder Market Regulation, pursuant to delegated
approval under such circumstances and IV. Solicitation of Comments authority.12
the Exchange believes it is necessary Interested persons are invited to Florence E. Harmon,
and appropriate to require listed issuers submit written data, views, and Deputy Secretary.
to obtain shareholder approval of any arguments concerning the foregoing, [FR Doc. E7–5206 Filed 3–21–07; 8:45 am]
issuance or potential issuance of including whether the proposed rule BILLING CODE 8010–01–P
additional listed securities that will change is consistent with the Act.
result in a change of control. The Comments may be submitted by any of
proposed rule change will provide the following methods:
investors of listed issuers with more Electronic Comments
input and participation with respect to
such decisions. • Use the Commission’s Internet
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comment form (

7 See
supra note 3.
rules/sro.shtml); or
8 Section
312.03(d) of the NYSE Listed Company
Manual. 10 15 U.S.C. 78f(b).
9 Nasdaq Rule 4350(i)(1)(B). 11 15 U.S.C. 78f(b)(5). 12 17 CFR 200.30–3(a)(12).

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