12 CFR § 7.2023 - National bank reverse stock splits.

---
identifier: "/us/cfr/t12/s7.2023"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "12 CFR § 7.2023 - National bank reverse stock splits."
title_number: 12
title_name: "Banks and Banking"
section_number: "7.2023"
section_name: "National bank reverse stock splits."
chapter_name: "COMPTROLLER OF THE CURRENCY, DEPARTMENT OF THE TREASURY"
part_number: "7"
part_name: "ACTIVITIES AND OPERATIONS"
positive_law: false
currency: "2026-04-05"
last_updated: "2026-04-05"
format_version: "1.1.0"
generator: "[email protected]"
authority: "12 U.S.C. 1  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)."
regulatory_source: "61 FR 4862, Feb. 9, 1996, unless otherwise noted."
cfr_part: "7"
---


# 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.

[64 FR 60099, Nov. 4, 1999]