2001 - 2002 LEGISLATURE
March 4, 2002 - Introduced by Representative Grothman, cosponsored by Senator
M. Meyer. Referred to Committee on Financial Institutions.
AB881,1,3 1An Act to amend 551.31 (6), 551.33 (1), 551.33 (6), 551.34 (1) (e) and 551.34 (1)
2(f) of the statutes; relating to: the regulation of investment adviser
Analysis by the Legislative Reference Bureau
Under current law, the division of securities in the department of financial
institutions (DFI) oversees the licensing of securities broker-dealers, agents,
investment advisers, and investment adviser representatives. Currently, an
investment adviser representative is generally subject to licensing requirements
similar to those applicable to a securities broker-dealer, agent, or investment
adviser. Furthermore, current law contains numerous requirements regulating
licensed securities broker-dealers, agents, and investment advisers. This bill
expands the coverage of current law to include investment adviser representatives
as regulated individuals under certain requirements currently applicable to
securities broker-dealers, agents, and investment advisers.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB881, s. 1 4Section 1 . 551.31 (6) of the statutes is amended to read:
1551.31 (6) It is unlawful for any licensed broker-dealer, agent or, investment
2adviser, or investment adviser representative, or any person directly or indirectly
3controlling a licensed broker-dealer or investment adviser, to transact business in
4this state if the licensee is in violation of this chapter, or any rule under this chapter,
5or any order under this chapter of which the licensee or person has notice, or if the
6information contained in the licensee's or person's application for license, as of the
7date of such transactions, is incomplete in any material respect or is false or
8misleading with respect to any material fact.
AB881, s. 2 9Section 2. 551.33 (1) of the statutes is amended to read:
AB881,2,1910 551.33 (1) Every licensed broker-dealer, agent and, investment adviser, and
11investment adviser representative
shall make and keep all accounts,
12correspondence, memoranda, papers, books and other records which the division
13prescribes by rule or order, subject to the limitations of section 15 of the Securities
14Exchange Act of 1934 for broker-dealers and section 222 of the Investment Advisers
15Act of 1940 for investment advisers. All records required shall be preserved for the
16period prescribed by the division by rule or order. All required records shall, at the
17request of the division, be made available at any time for examination by the division
18either in the principal office of the licensee or by production of exact copies thereof
19in this state.
AB881, s. 3 20Section 3. 551.33 (6) of the statutes is amended to read:
AB881,2,2321 551.33 (6) The division may by rule establish standards for the conduct of
22business by broker-dealers, agents, investment advisers, investment adviser
and clearing corporations as defined in s. 408.102 (1) (e).
AB881, s. 4 24Section 4. 551.34 (1) (e) of the statutes is amended to read:
1551.34 (1) (e) Is the subject of an order of the division denying an application
2or suspending or revoking a license as a broker-dealer, agent or , investment adviser,
3or investment adviser representative
AB881, s. 5 4Section 5 . 551.34 (1) (f) of the statutes is amended to read:
AB881,3,185 551.34 (1) (f) Is the subject of an order entered within the past 5 years by the
6securities administrator of any other state or by the securities and exchange
7commission denying, suspending or revoking the person's registration or license as
8a broker-dealer, agent, investment adviser, investment adviser representative, or
9federal covered adviser, or is the subject of an order of the securities and exchange
10commission or of a securities exchange or association registered under the Securities
11Exchange Act of 1934 suspending or expelling such person from a securities
12exchange or association or forbidding the association or affiliation of the person with
13a broker-dealer or investment adviser, or is the subject of a U.S. postal service fraud
14order. The division may not institute a revocation or suspension proceeding under
15this paragraph more than one year from the date of the order relied on, and the
16division may not enter an order under this paragraph on the basis of an order under
17another state law or federal law unless the order was based on facts which would
18currently constitute a ground for an order under this section;
AB881,3,1919 (End)