DFI-Sec 5.06(21)
(21) Failing to establish, maintain, and enforce written policies and procedures reasonably designed to prevent the misuse of material nonpublic information contrary to the provisions of Section 204A of the Investment Advisers Act of 1940.
DFI-Sec 5.06(22)
(22) Disclosing the identity, investments, or other financial information of any client or former client unless required by law to do so, or unless consented to by the client.
DFI-Sec 5.06(23)
(23) Engaging in conduct or any act, indirectly or through or by any other person, which would be unlawful for such person to do directly under
ch. 551, Stats., or any rule thereunder.
DFI-Sec 5.06(24)
(24) Using any term or abbreviation thereof in a manner that misleadingly states or implies that a person has special expertise, certification, or training in financial planning, including the misleading use of a senior-specific certification or designation as set forth in
ch. DFI-Sec 10.
DFI-Sec 5.06(25)
(25) Paying a cash fee or any other economic benefit, directly or indirectly, in connection with solicitation activities unless the requirements of
pars. (a) through
(d) are met.
DFI-Sec 5.06(25)(a)
(a) The solicitor is registered as an investment adviser or investment adviser representative or is exempt from registration as provided for in
s. DFI-Sec 5.13 (2).
DFI-Sec 5.06(25)(b)
(b) The
cash fee or any other economic benefit is paid by the investment adviser with respect to solicitation activities that are impersonal in nature in that they are provided solely by means of:
DFI-Sec 5.06(25)(b)1.
1. Written material or oral statements which do not purport to meet the objectives or needs of the specific client; or
DFI-Sec 5.06(25)(b)2.
2. Statistical information containing no expressions of opinions as to the merits of particular securities or investment advisers; or
DFI-Sec 5.06(25)(c)
(c) The cash fee or any other economic benefit is paid pursuant to a written agreement to which the investment adviser is a party and all of the following conditions are met:
DFI-Sec 5.06(25)(c)1.a.
a. Describes the solicitation or referral activities to be engaged in by the solicitor on behalf of the investment adviser and the cash fee or any other economic benefit to be received for such activities; and
DFI-Sec 5.06(25)(c)1.b.
b. Contains an undertaking by the solicitor to perform its duties under the agreement in a manner consistent with the instructions of the investment adviser and the provisions of
ch. 551, Stats., and rules there under; and
DFI-Sec 5.06(25)(c)1.c.
c. Requires that the solicitor, at the time of any solicitation or referral activities for which a cash fee or any other economic benefit is paid or to be paid by the investment adviser, provide the client with a current copy of the investment adviser's disclosure document required under
s. DFI-Sec 5.05 (8) and a separate disclosure statement as described in
par. (d), either in paper or electronic format; and
DFI-Sec 5.06(25)(c)2.
2. The investment adviser receives from the client, prior to or at the time of entering into any written investment advisory contract, a signed and dated acknowledgement of receipt of the investment adviser's written disclosure statement and the solicitor's written disclosure document; and
DFI-Sec 5.06(25)(c)3.
3. The investment adviser makes a bona fide effort and has a reasonable basis for believing that the solicitor has complied with the agreement; and
DFI-Sec 5.06(25)(c)4.b.
b. A partner, officer, director or employee of a person that controls, is controlled by, or is under common control with such investment adviser, provided the status of the solicitor is disclosed to the client at the time of the solicitation or referral.
DFI-Sec 5.06(25)(d)
(d) The separate written disclosure document required to be furnished by the solicitor to the client pursuant to
par. (c) 1. c. shall contain the following information:
DFI-Sec 5.06(25)(d)3.
3. The nature of the relationship, including any affiliation, between the solicitor and the investment adviser;
DFI-Sec 5.06(25)(d)4.
4. A statement that the solicitor will be compensated for solicitation or referral services by the investment adviser;
DFI-Sec 5.06(25)(d)5.
5. The terms of the compensation arrangement including a description of the cash fee or any other economic benefit paid or to be paid to the solicitor; and
DFI-Sec 5.06(25)(d)6.
6. The amount of compensation the client will pay, if any, in addition to the advisory fees, and whether the cash fee or any other economic benefit paid to the solicitor will be added to the advisory fee, creating a differential with respect to the amount charged to other advisory clients who are not subject to the solicitor compensation arrangement.
DFI-Sec 5.06(25)(e)
(e) Nothing in this subsection shall be deemed to relieve any person of any fiduciary or other obligation to which such person may be subject under any law.
DFI-Sec 5.06 History
History: Cr.
Register, December, 1977, No. 264, eff. 1-1-78; am. (intro.) and (1), renum. (2) to be (8) and am., cr. (2) to (7),
Register, December, 1980, No. 300, eff. 1-1-81; am. (9), cr. (10),
Register, December, 1986, No. 372, eff. 1-1-87; cr. (11),
Register, December, 1989, No. 408, eff. 1-1-90
; am. (9), (10),
Register, December, 1996, No. 492, eff. 1-1-97; am. (intro.), cr. (12) and (13),
Register, December, 1998, No. 516, eff. 1-1-99; am. (6),
Register, December, 1999, No. 528, eff. 1-1-00;
CR 04-074: am. (12)
Register December 2004 No. 588, eff. 1-1-05;
CR 08-077: am. (title), (intro.) to (6), (9), (10) and (13), r. and recr. (7), cr. (14) to (23)
Register December 2008 No 636, eff. 1-1-09; corrections in (9) and (10) made under s.
13.92 (4) (b) 7., Stats.,
Register December 2008 No. 636;
EmR0829: emerg. cr. (14), eff. 9-18-08;
CR 08-095: cr. (24)
Register March 2009 No. 639, eff. 4-1-09;
CR 10-062: cr. (25) Register September 2010 No. 657, eff. 10-1-10. DFI-Sec 5.07
DFI-Sec 5.07 Registration and notice filing period. DFI-Sec 5.07(1)(1) The registration of an investment adviser expires on December 31 of each year. Each registered investment adviser seeking renewal of its registration shall file for renewal with the investment adviser registration depository according to the depository's schedule.
DFI-Sec 5.07(2)(a)(a) The registration of an investment adviser representative expires on the same day as the expiration of the registration of the investment adviser or the notice filing of the federal covered investment adviser which the person represents. The registration of an investment adviser representative is not effective during any period when the investment adviser which that person represents is not registered, or when the federal covered investment adviser that the person represents does not have an effective notice filing with the division, or during any period when the representative is not employed either by a specified investment adviser registered under
ch. 551, Stats., or a federal covered investment adviser that has filed a notice with the division under s.
551.405, Stats. Each registered investment adviser representative seeking renewal of his or her registration shall file for renewal with the central registration depository according to the depository's schedule.
DFI-Sec 5.07(2)(b)
(b) An agent of a broker-dealer that is also registered as an investment adviser or notice filed as a federal covered investment adviser shall also register as an investment adviser representative of that investment adviser or federal covered investment adviser pursuant to s.
551.404, Stats.
DFI-Sec 5.07 History
History: Cr.
Register, December, 1977, No. 264, eff. 1-1-78; am.,
Register, December, 1980, No. 300, eff. 1-1-81
; am. (1),
Register, December, 1994, No. 468, eff. 1-1-95; am. (1) and (2), cr. (3) and (4),
Register, December, 1998, No. 516, eff. 1-1-99; emerg. r. and recr. eff. 1-1-01;
CR 01-025: r. and recr.,
Register July 2001, No. 547 eff. 8-1-01;
CR 02-102: am. (1), renum. (2) to be (2) (a) and am., cr. (2) (b),
Register December 2002 No. 564, eff. 1-1-03;
correction in (2) (b) made under s. 13.93 (2m) (b) 7., Stats.,
Register December 2004 No. 588;
CR 08-077: am. (title), (1) and (2) (a), r. and recr. (2) (b)
Register December 2008 No. 636, eff. 1-1-09.
DFI-Sec 5.08(1)
(1) An application for withdrawal from the status of a registered investment adviser under s.
551.409, Stats., shall be filed with the investment adviser registration depository on Form ADV-W.
DFI-Sec 5.08(2)
(2) An application for withdrawal from the status of a registered investment adviser representative shall be filed with the central registration depository on Form U-5 within 30 days of the termination of the representative's employment pursuant to s.
551.409, Stats.
DFI-Sec 5.08 History
History: Cr.
Register, December, 1977, No. 264, eff. 1-1-78; am. (1) and (2),
Register, December, 1979, No. 288, eff. 1-1-80; am. (2),
Register, December, 1982, No. 324, eff. 1-1-83; am.
Register, December, 1994, No. 468, eff. 1-1-95; am. (2),
Register, December, 1998, No. 516, eff. 1-1-99
; correction in (1) made under s. 13.93 (2m) (b) 7., Stats.,
Register, August, 1999, No. 524;
CR 01-025: r. and recr.,
Register July 2001, No. 547 eff. 8-1-01;
CR 02-102: am. (2),
Register December 2002 No. 564, eff. 1-1-03;
CR 08-077: am.
Register December 2008 No. 636, eff. 1-1-09.
DFI-Sec 5.09
DFI-Sec 5.09 Denial, suspension, revocation and censure. DFI-Sec 5.09(1)(1) Any order denying, suspending or revoking the registration of an investment adviser or an investment adviser representative or censuring a registrant may include such other sanctions as the division finds appropriate.
DFI-Sec 5.09(2)
(2) For purposes of s.
551.412 (1), Stats., the public interest or protection of investors does not require a showing of ongoing harm to summarily deny an application for a registration as an investment adviser or investment adviser representative.
DFI-Sec 5.09 History
History: Cr.
Register, December, 1977, No. 264, eff. 1-1-78; am.
Register, December, 1998, No. 516, eff. 1-1-99;
CR 08-077: renum. to be (1) and am., cr. (2)
Register December 2008 No. 636, eff. 1-1-09.
DFI-Sec 5.10(1)
(1) Each investment adviser shall file a copy of its current form ADV Parts 1 and II electronically with the Investment Adviser Registration Depository.
DFI-Sec 5.10(2)
(2) Any documents or fees required to be filed with the division that are not permitted to be filed with, or cannot be accepted by, the investment adviser registration depository or the central registration depository shall be filed directly with the division.
DFI-Sec 5.10(3)
(3) Each investment adviser that is registered in this state on January 1, 2011 shall file a copy of its current form ADV Part 2 electronically with the Investment Adviser Registration Depository by no later than July 1, 2011.
DFI-Sec 5.11
DFI-Sec 5.11 Federal covered investment adviser notice filing procedure. DFI-Sec 5.11(1)
(1) The notice filing for a federal covered investment adviser pursuant to s.
551.405, Stats., shall be filed with the investment adviser registration depository on Form ADV. A notice filing for a federal covered investment adviser shall be deemed filed when the fee on deposit with the investment adviser registration depository has been allocated to the division. Any documents or fees required to be filed with the division that are not permitted to be filed with, or cannot be accepted by, the investment adviser registration depository shall be filed directly with the division.
DFI-Sec 5.11(2)
(2) A federal covered investment adviser shall file all amendments to its Form ADV with the investment adviser registration depository according to the instructions to Form ADV.
DFI-Sec 5.11(3)
(3) Each federal covered investment adviser seeking renewal of its notice filing shall file for renewal with the investment adviser registration depository according to the investment adviser registration depository's schedule and instructions. An application for renewal of a notice filing under this paragraph shall be deemed filed under s.
551.405, Stats., when the fee on deposit with the investment adviser registration depository has been allocated to the division.
DFI-Sec 5.11(4)
(4) Each federal covered investment adviser shall pay its branch office renewal fees prescribed in s.
551.614 (2), Stats., to the division by December 1 of each year.
DFI-Sec 5.11 History
History: emerg. cr. eff. 1-1-01;
CR 01-025: cr.
Register July 2001, No. 547 eff. 8-1-01;
CR 02-102: am. (3),
Register December 2002 No. 564, eff. 1-1-03;
CR 08-077: am. (title) and (1) to (3), cr. (4)
Register December 2008 No. 636, eff. 1-1-09.
DFI-Sec 5.12
DFI-Sec 5.12 Transition filing. An agent who is registered in this state on December 31, 2008 for a registered broker-dealer that was also approved to act as an investment adviser in this state and who also met the examination requirement in
s. DFI-Sec 5.01 (3), shall make a transition filing electronically with the investment adviser registration depository not later than June 1, 2009.
DFI-Sec 5.12 History
History: emerg. cr. eff. 1-1-01;
CR 01-025: cr.
Register July 2001, No. 547 eff. 8-1-01;
CR 02-102: am. (4),
Register December 2002 No. 564, eff. 1-1-03;
CR 08-077: r. and recr.
Register December 2008 No. 636, eff. 1-1-09.
DFI-Sec 5.13(1)
(1) For purposes of ss.
551.403 (2) and
551.404 (2), Stats., an investment adviser or an investment adviser representative is exempt from the registration requirement if its only transactions effected in this state are with:
DFI-Sec 5.13(1)(a)
(a) This state or any of its agencies or political subdivisions or the state investment board.
DFI-Sec 5.13(1)(b)
(b) The federal government or any of its agencies or instrumentalities.
DFI-Sec 5.13(2)
(2) A solicitor is not required to be registered as an investment adviser or as an investment adviser representative if the solicitor is in compliance with all requirements of
s. DFI-Sec 5.06 (25), and the solicitor satisfies
par. (a) or
(b).
DFI-Sec 5.13(2)(a)
(a) Provides solicitation activities that are impersonal in nature as set forth in
s. DFI-Sec 5.06 (25) (b) and the solicitor to whom a cash fee or any other economic benefit is paid for such referral does not trigger any of the following as being a person:
DFI-Sec 5.13(2)(a)1.
1. Subject to an order of the U.S. Securities & Exchange Commission issued under section 203(f) of the Investment Advisers Act of 1940;
DFI-Sec 5.13(2)(a)2.
2. Subject to an order of the administrator, the securities administrator of any other state, the U.S. Securities and Exchange Commission, or any self regulatory organization denying, suspending, or revoking registration as a broker-dealer, agent, investment adviser, or investment adviser representative or barring the person from the securities or advisory industry or associating or affiliating with the securities or advisory industry, entered after notice and opportunity for hearing;
DFI-Sec 5.13(2)(a)3.
3. Convicted within the previous ten years of any felony, or any misdemeanor involving conduct described in section 203(e)(2)(A) through (D) of the Investment Advisers Act of 1940;
DFI-Sec 5.13(2)(a)5.
5. Found by the U.S. Securities & Exchange Commission to have engaged, or has been convicted of engaging in, any of the conduct specified in section 203(e)(1), (5) or (6) of the Investment Advisers Act of 1940;
DFI-Sec 5.13(2)(a)7.
7. Subject to an order, judgment or decree described in section 203(e)(4) of the Investment Advisers Act of 1940;
DFI-Sec 5.13(2)(b)
(b) Receives an order of the administrator waiving the registration requirement.
DFI-Sec 5.13(3)
(3) For purposes of s.
551.102 (16) (c), Stats., “associated with" does not include third party solicitors whose only relationship with a federal covered investment adviser is a contract to solicit or refer clients in return for compensation.
DFI-Sec 5.13(4)
(4) A supervised person of a federal covered investment adviser notice filed in this state is exempt from the registration requirement in s.
551.404 (1), Stats., if that supervised person has no place of business in this state.
