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Pursuant to an agreement and plan of merger dated January 17, 2008, and subject to SEC approval, The Amex Membership Corporation ("MC"), which owns the American Stock Exchange LLC (the "Exchange"), is being acquired by NYSE Euronext, the parent company of the New York Stock Exchange LLC ("NYSE") and NYSE Arca, Inc. ("NYSE Arca").Following the completion of the acquisition, MC will be demutualized and the Exchange will be renamed "NYSE Alternext US LLC". 1
Immediately following the completion of the acquisition, all products currently listed and traded on the Exchange will continue to be listed and traded on the existing Exchange trading facilities for some period of time. Thereafter, subject to SEC approval, all products currently listed and traded on the Exchange will be relocated to the trading floor and facilities of NYSE and NYSE Arca, as explained in more detail below.
Although it is anticipated that the relocation of listing and/or trading of Exchange products will, in some cases, occur fairly quickly after the closing of the acquisition, there will still be a period of time (referred to herein as the "Transition Period") in which the products currently traded on the Exchange will continue to trade on the trading floor and trading systems at 86 Trinity Place.
Trading on the Exchange During the Transition Period
The acquisition and related demutualization will result in the cancellation of all trading rights relating to Regular Memberships and Options Principal Memberships ("OPMs") existing immediately prior to the acquisition. In addition, lessees will cease to have any trading rights under any applicable leases. Trading rights, including physical and electronic access to the Exchange's trading facilities during the Transition Period, will be made available to individuals and organizations that obtain a temporary trading permit (to be known as an "86 Trinity Permit") from the Exchange.
Members and member organizations who wish to continue to have trading rights during the Transition Period should apply for 86 Trinity Permits. New individuals and organizations who did not have trading rights prior to the acquisition may also apply for 86 Trinity Permits.
Applicants must meet the requirements of the Exchange Rules which will be operative following completion of the acquisition (See in particular, proposed Exchange Rules 353 and 356). The proposed requirements for 86 Trinity Permits are comparable to the current requirements for Exchange membership.
To ensure continuity of trading following the acquisition, individuals and organizations who were authorized to trade on the Exchange immediately prior to the acquisition, including
86 Trinity Permits will only allow the holders to trade products currently traded on the Exchange, including equities, ETFs and certain structured products ("Special Products"), bonds and options, during the relevant Transition Period for each.
Trading on the Exchange after the Transition Period
After the Transition Period, subject to SEC approval, all products currently listed and traded on the Exchange will be relocated to the trading floor and facilities of NYSE and NYSE Arca. The following is a description of the changes:
The completion of the transition of the listing and trading of the Exchange's products will be as follows:
| Product | Listing | Trading | Timeline |
|---|---|---|---|
| Equities | Exchange (except as noted below) | Relocated to the NYSE trading floor at 11 Wall Street, utilizing the NYSE trading systems | Early December 2008 |
| Special Products | NYSE Arca (assuming issuer consent) | On NYSE Arca (all electronic) | Progressive; by late October 2008 |
| Options | Exchange | Relocated to the NYSE trading floor, utilizing trading systems based on those of NYSE Arca | Mid February 2009 |
| Bonds | NYSE (assuming issuer consent) | NYSE Bonds trading system (all electronic) | Progressive; by late October 2008 |
The Exchange expects the transfer of all listings of Special Products and bonds to be completed prior to the relocation of both the equities and options trading floors and systems. At the time of the completion of the final transfer of the Special Products and bonds, the 86 Trinity Permits holders will cease to have the right to trade the Special Products and bonds. When the listing and trading of Special Products are relocated to NYSE Arca and bonds are relocated to NYSE, only holders of permits from NYSE Arca and licenses from NYSE, respectively, will have the right to trade the products associated with such permits and licenses.
Upon the relocation of trading floors and systems for equities and options, the Exchange will issue equity trading licenses ("ETLs") and options trading permits ("OTPs"), respectively. Given the timeline above, the Exchange expects to issue ETLs before it issues OTPs. At the time of the equities relocation and ETL issuance, only holders of ETLs will have the right to trade equities. In other words, 86 Trinity Permit holders will cease to have the right to trade equities and will only have the right to trade options.
At the time of the options relocation and OTP issuance, only OTP holders will have the right to trade options, and all 86 Trinity Permits will be cancelled completely.
Applications for 86 Trinity Permits
Attached to this Notice is the 86 Trinity Permit Application form; an electronic version of the form can be found on the Amextrader.com website in the Membership Section-Forms and Applications. All members and member organizations seeking to continue to trade on the Exchange during the Transition Period are required to complete the 86 Trinity Application and return it to the Membership & Registration Department as soon as possible so that trading after the acquisition closes will not be interrupted. No member or member organization will be allowed to continue trading at 86 Trinity after the acquisition unless an 86 Trinity Permit Application has been submitted to and approved by the Membership & Registration Department of the Exchange. While the date of the closing of the acquisition has not yet been determined, please note that we currently expect the acquisition to close within a few weeks or as soon thereafter as is practicable. We strongly recommend that interested persons submit the 86 Trinity Permit Application no later than August 28, 2008.
To trade Special Products and/or bonds after the relocation to NYSE Arca and NYSE, respectively, please contact the Client Relationship Services at 1-888-689-7739 (Option 3) or crs@nyx.com. A notice regarding the ETL and OTP application process will be distributed shortly.For further information, please contact the Membership & Registration Department staff at 212-306-5959.
1 More detailed information regarding the acquisition is contained in File No. SR-AMEX-2008-62, which can be accessed on www.amex.com by following the "Rule Filings" link.