---
kind: "section"
citation: "12 C.F.R. § 7.2023"
title: "12"
number: "7.2023"
heading: "National bank reverse stock splits."
url: "https://uscodex.org/cfr/12/7.2023"
---

# §7.2023. National bank reverse stock splits.

- (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.**

## Notes

### Amendments

[64 FR 60099, Nov. 4, 1999]

### Authority

Authority: 12 U.S.C. 1 et seq., 25b, 29, 71, 71a, 92, 92a, 93, 93a, 95(b)(1), 371, 371d, 481, 484, 1462a, 1463, 1464, 1465, 1818, 1828, 3102(b), and 5412(b)(2)(B).

### Source

Source: 61 FR 4862, Feb. 9, 1996, unless otherwise noted.

### Amendments

[64 FR 60099, Nov. 4, 1999]