Regulatory Alerts2007-03-02
Applicability of Section 112 of the Banking Code of 1965 to Proxy Solicitations
The Pennsylvania Department of Banking reaffirms that an individual soliciting revocable proxies from over 10% of a bank holding company's shareholders must obtain prior written approval under Section 112 of the Banking Code. The Department interprets this proxy solicitation as a proposal to acquire voting rights, which constitutes an acquisition of shares requiring regulatory consent regardless of federal securities law compliance. Conversely, the holding company's directors are exempt from this approval requirement as their actions fall under the statutory exception for proposals by the issuer.
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