12 C.F.R. § 7.2020 Acquisition and holding of shares as treasury stock.
Title 12 - Banks and Banking
(a) Acquisition of outstanding shares. Pursuant to 12 U.S.C. 59, including the requirements for prior approval by the bank's shareholders and the OCC imposed by that statute, a national bank may acquire its outstanding shares and hold them as treasury stock, if the acquisition and retention of the shares is, and continues to be, for a legitimate corporate purpose. (b) Legitimate corporate purpose. Examples of legitimate corporate purposes include the acquisition and holding of treasury stock to: (1) Have shares available for use in connection with employee stock option, bonus, purchase, or similar plans; (2) Sell to a director for the purpose of acquiring qualifying shares; (3) Purchase a director's qualifying shares upon the cessation of the director's service in that capacity if there is no ready market for the shares; (4) Reduce the number of shareholders in order to qualify as a Subchapter S corporation; and (5) Reduce costs associated with shareholder communications and meetings. (c) Prohibition. It is not a legitimate corporate purpose to acquire or hold treasury stock on speculation about changes in its value. [64 FR 60099, Nov. 4, 1999]
Title 12: Banks and Banking
PART 7—BANK ACTIVITIES AND OPERATIONS
Subpart B—Corporate Practices
§ 7.2020 Acquisition and holding of shares as treasury stock.
