CFR > Title 12 - Banks and Banking > CHAPTER I—COMPTROLLER OF THE CURRENCY, DEPARTMENT OF THE TREASURY > PART 7—BANK ACTIVITIES AND OPERATIONS > SUBPART B—Corporate Practices (§7.2000 to §7.2024) > 7.2023—Reverse stock splits.

7.2023—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.

Code of Federal Regulations

[64 FR 60099, Nov. 4, 1999]