
[Federal Register: March 5, 2008 (Volume 73, Number 44)]
[Notices]               
[Page 11962-11963]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05mr08-111]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57393; File No. SR-Amex-2007-79]

 
Self-Regulatory Organizations; American Stock Exchange LLC; Order 
Granting Approval of Proposed Rule Change as Modified by Amendments No. 
1, 2, and 3 Relating to Independent Directors and Audit Committee 
Members

February 27, 2008.
    On September 18, 2007, 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 relating to independent directors and audit 
committee members. On November 8, 2007 and November 16, 2007, Amex 
submitted Amendments No. 1 and 2, respectively, to the proposed rule 
change. The proposed rule change as modified by Amendments No. 1 and 2 
was published for comment in the Federal Register on December 27, 
2007.\3\ The Commission received no comments on the proposal. On 
February 14, 2008, Amex submitted Amendment No. 3 to the proposed rule 
change.\4\
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    \1\ 15 U.S.C. 78s(b)(l).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 56982 (December 18, 
2007), 72 FR 73386 (December 27, 2007).
    \4\ Amendment No. 3 was a technical amendment not subject to 
notice and comment.
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    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange and, in 
particular, the requirements of Section 6(b)(5) of the Act,\5\ because 
it allows an issuer a reasonable period of time (``cure period'') to 
fill a vacancy on its audit committee when the number of members on 
such committee has fallen below the minimum required by the Exchange's 
rules; and to restore the proportion of independent directors on its 
board to the level required by the Exchange's rules in a situation when 
a vacancy arises or an independent director ceases to be independent 
due to circumstances beyond his or her reasonable control.\6\
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    \5\ 15 U.S.C. 78f(b)(5).
    \6\ The Commission notes that the proposed rule change does not 
affect the cure period afforded to an issuer for purposes of 
compliance with the Exchange's independence standards for audit 
committee members, including those required by Rule 10A-3 under the 
Act, 17 CFR 240.10A-3. The proposal rather relates to situations in 
which a vacancy arises on an issuer's audit committee, as, for 
example, in a case where a resignation or death causes the number of 
independent directors on the committee to fall below the minimum 
required by Amex's rules (two in the case of Small Business Issuers 
as defined in the Amex's rules and three for all other issuers). The 
proposal further relates to situations in which a vacancy arises on 
an issuer's board or an independent director on an issuer's board 
ceases to be independent due to circumstances beyond his or her 
reasonable control such that the issuer no longer meets the Amex 
standard requiring that a majority of directors on an issuer's board 
be independent (or 50% of the directors, in the case of Small 
Business Issuers).
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    The Commission notes that the cure period established by the 
proposed rule change for issuers generally is consistent with the 
period provided in the rule of another exchange previously approved by 
the Commission.\7\ Further, the Commission believes that the proposal 
appropriately adjusts the cure period for Small Business Issuers (as 
defined in Amex's rules) in view of the

[[Page 11963]]

modified standards that Amex imposes on such issuers.\8\
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    \7\ See NASDAQ Manual, Rule 4350(c) and (d). See Securities 
Exchange Act Release No. 54421 (September 11, 2006), 71 FR 54698 
(September 18, 2006).
    \8\ The Commission notes that on January 25, 2008, Amex 
submitted File Number SR-Amex-2008-05 to further amend Amex 
corporate governance listing standards to conform to recent 
Commission amendments and forms relating to smaller reporting 
companies.
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\9\ that the proposed rule change (SR-Amex-2007-79), as amended, 
be, and hereby is, approved.\10\
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    \9\ 15 U.S.C. 78s(b)(2).
    \10\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-4176 Filed 3-4-08; 8:45 am]

BILLING CODE 8011-01-P
