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We spoke with an official with the Federal Reserve Bank of Atlanta official yesterday who informed us that:

• Non-exchange-listed public companies are being considered “private companies” or as “not publicly traded” by the Treasury Department; and
• While the federal banking regulators will continue to review applications by private companies at this time, they have been instructed not to forward such applications to the Treasury Department until further guidance is published by the Treasury Department.

We think a distinction between “exchange-listed” (typically NYSE, NASDAQ or AMEX) and “non-exchange-listed” (typically OTCBB, PinkSheets, or just traded over the president’s desk) is a significant different, and it is reasonable that the Treasury Department would want to treat them differently.  It will be far easier to set a “market” price for the warrants for the “exchange-listed” companies.  For clarity, we would suggest the use of Securities Exchange Act of 1934 terminology – “exchange-listed” companies are those that have one or more classes of securities registered under Section 12(b) of the Exchange Act, while “non-exchange-listed” companies are those with classes of securities registered under Section 12(g) or 15(d) of the Exchange Act.

The most important aspect of this clarification is the conclusion by the Federal Reserve that non-exchange-listed companies do not need to comply with the November 14, 2008 deadline, but rather will have a subsequent deadline and application process set by the Treasury Department.  We recognize that this guidance from the Federal Reserve is in conflict with the advice provided by the ABA on its conference call on Monday.  Hopefully, the Treasury Department will issue new clarifying guidance prior to November 14th.  Otherwise, we highly recommend that affected institutions be in contact with their primary federal regulator to discuss how to proceed.

For all companies other than exchange-listed companies, it may still be worthwile to submit applications to their primary federal regulators, although the urgency expressed last week appears to have declined.  We see little downside, however, to applying now.  Institutions will always be permitted to withdraw their application at a subsequent date.