Title 12
SECTION 7.2023
7.2023 Reverse stock splits.
§ 7.2023 Reverse stock splits. Link to an amendment published at 85 FR 83736, Dec. 22, 2020.(a) Authority to engage in reverse stock splits. A national bank may engage in a reverse stock split if the transaction serves a legitimate corporate purpose and provides adequate dissenting shareholders' rights.
(b) Legitimate corporate purpose. Examples of legitimate corporate purposes include a reverse stock split to:
(1) Reduce the number of shareholders in order to qualify as a Subchapter S corporation; and
(2) Reduce costs associated with shareholder communications and meetings.
[64 FR 60099, Nov. 4, 1999]