AB831,7,97
a. Not more than a percentage, specified by the division by rule, of the clients
8of the supervised person are natural persons who are not excepted persons, as
9defined by the division by rule.
AB831,7,1210
b. The supervised person does not, on a regular basis, solicit, meet with or
11otherwise communicate with clients of the investment adviser or federal covered
12adviser.
AB831,7,1413
c. The supervised person provides only impersonal investment advice, as
14defined by the division by rule.
AB831,7,1515
2. A 3rd-party solicitor, as defined by the division by rule.
AB831,7,1716
(b) "Investment adviser representative" does not include any person excluded
17by the division by rule or order.
AB831, s. 13
18Section
13. 551.02 (12) of the statutes is amended to read:
AB831,7,2419
551.02
(12) "Securities
act Act of 1933", "
securities exchange act Securities
20Exchange Act of 1934", "
investment company act
Investment Company Act of 1940",
21"
investment advisers act Investment Advisers Act of 1940" and "
internal revenue
22code Internal Revenue Code" mean the federal statutes of those names as amended
23on January 1,
1970 1998, including such later amendments as the division
24determines are not inconsistent with the purpose of this chapter.
AB831, s. 14
1Section
14. Subchapter II (title) of chapter 551 [precedes 551.21] of the
2statutes is amended to read:
AB831,8,75
REGISTRATION
OF and
6
notice filing procedures;7
SECURITIES
AB831, s. 15
8Section
15. 551.21 (1) of the statutes is renumbered 551.21 (1) (intro.) and
9amended to read:
AB831,8,1110
551.21
(1) (intro.) It is unlawful for any person to offer or sell any security in
11this state unless
it at least one of the following conditions is met:
AB831,8,12
12(a) The security is registered under this chapter
or the.
AB831,8,13
13(b) The security or transaction is exempted under s. 551.22 or 551.23.
AB831, s. 16
14Section
16. 551.21 (1) (c) of the statutes is created to read:
AB831,8,1515
551.21
(1) (c) The security is a federal covered security.
AB831, s. 17
16Section
17. 551.22 (7) of the statutes is amended to read:
AB831,9,217
551.22
(7) Any security listed, or approved for listing upon notice of issuance,
18on
the New York stock exchange, the American stock exchange, or a securities
19exchange designated by rule of the division
; any security designated, or approved for
20designation upon notice of issuance, as a national market system security by the
21national association of securities dealers, inc., subject to rules that the division may
22promulgate under this subsection; any security of the same issuer which is of senior
23or substantially equal rank to the security listed, designated or approved for listing
24or designation; any security called for by subscription rights or warrants so listed,
1approved or designated; or any warrant or right to purchase or subscribe to any of
2the foregoing.
AB831, s. 18
3Section
18. 551.23 (3) (intro.) of the statutes is amended to read:
AB831,9,74
551.23
(3) (intro.) Any sale of any outstanding security by or on behalf of a
5person not the issuer and not in control of the issuer or controlled by the issuer or
6under common control with the issuer at a price reasonably related to the current
7market price if
any of the following conditions are met:
AB831, s. 19
8Section
19. 551.23 (3) (a) of the statutes is amended to read:
AB831,9,139
551.23
(3) (a) The issuer has any securities registered under section 12 of the
10securities exchange act Securities Exchange Act of 1934 or exempted from
11registration by section 12 (g) (2) (G) or 12 (g) (3) of that act, or the issuer is an
12investment company registered under the
investment company act Investment
13Company Act of 1940
; or.
AB831, s. 20
14Section
20. 551.23 (3) (b) of the statutes is amended to read:
AB831,9,1715
551.23
(3) (b) Securities of the same class have been registered under this
16chapter under a registration statement becoming effective within 2 years preceding
17the sale and the registration has not been revoked or suspended
; or.
AB831, s. 21
18Section
21. 551.23 (3) (c) of the statutes is amended to read:
AB831,9,2519
551.23
(3) (c) Securities of the same class have been registered under the
20securities act Securities Act of 1933 and there is filed with the division prior to any
21offer or sale a notice of the proposed sale, other information as the division by rule
22requires and any additional information required under s. 551.24 (6), and the
23division does not by order disallow the exemption within 10 days after the date of
24filing the notice or, if additional information is required under s. 551.24 (6), within
2510 days after the date of filing that information
; or
.
AB831, s. 22
1Section
22. 551.23 (8) (b) and (c) of the statutes are amended to read:
AB831,10,52
551.23
(8) (b) A bank, savings institution, savings bank, credit union, trust
3company, insurer, broker-dealer, investment adviser
, federal covered adviser or
4savings and loan association, if the purchaser or prospective purchaser is acting for
5itself or as trustee with investment control.
AB831,10,126(c) An investment company as defined under
15 USC 80a-3 or a pension or
7profit-sharing trust, except that an offer or sale of a security to a pension or
8profit-sharing trust or to an individual retirement plan, including a self-employed
9individual retirement plan, is not exempt under this paragraph unless the trust or
10plan is administered by a bank, savings institution, savings bank, credit union, trust
11company, insurer, broker-dealer, investment adviser
, federal covered adviser or
12savings and loan association that has investment control.
AB831, s. 23
13Section
23. 551.23 (16) of the statutes is amended to read:
AB831,10,1714
551.23
(16) Any offer, but not a sale, of a security for which registration
15statements have been filed under both this chapter and the
securities act Securities
16Act of 1933 if no stop order or denial order is in effect and no proceeding is pending
17under either law.
AB831, s. 24
18Section
24. 551.23 (19) (a) of the statutes is amended to read:
AB831,10,2319
551.23
(19) (a) Any offer or sale of securities made in reliance on the
exemptions 20exemption provided by Rule 505
or 506 of Regulation D under the
securities act 21Securities Act of 1933 and the conditions and definitions provided by Rules 501 to
22503 thereunder, if the offer or sale also satisfies the additional conditions and
23limitations in pars. (b) to (f).
AB831, s. 25
24Section
25. 551.23 (19) (b) of the statutes is amended to read:
AB831,11,4
1551.23
(19) (b) No commission or other remuneration may be paid or given,
2directly or indirectly, to any person for soliciting or selling to any person in this state
3in reliance on the exemption under par. (a), except to broker-dealers and agents
4licensed in this state
or exempt from licensure under s. 551.31 (1).
AB831, s. 26
5Section
26. 551.23 (19) (d) of the statutes is amended to read:
AB831,11,136
551.23
(19) (d) Not later than the earlier of the date on which the first use of
7an offering document or the first sale is made in this state in reliance on the
8exemption under par. (a), there is filed with the division a notice comprised of offering
9material in compliance with the requirements of Rule 502 of Regulation D under the
10securities act Securities Act of 1933, a completed Form D as prescribed by Rule 503
11of Regulation D under the
securities act Securities Act of 1933, and a fee of $200.
12Material amendments to the offering document shall be filed with the division not
13later than the date of their first use in this state.
AB831, s. 27
14Section
27. 551.25 (1) of the statutes is amended to read:
AB831,11,1715
551.25
(1) Registration by coordination may be used for any security for which
16a registration statement has been filed under the
securities act Securities Act of 1933
17in connection with the same offering and has not become effective.
AB831, s. 28
18Section
28. 551.25 (2) (intro.) of the statutes is amended to read:
AB831,11,2219
551.25
(2) (intro.) A registration statement under this section shall contain
all
20of the following information and be accompanied by the following documents in
21addition to the information specified in s. 551.27 (2) and the consent to service of
22process required by s. 551.65 (1):
AB831, s. 29
23Section
29. 551.25 (2) (a) of the statutes is amended to read:
AB831,11,2524
551.25
(2) (a) Three copies of the latest form of prospectus filed under the
25securities act Securities Act of 1933
;.
AB831, s. 30
1Section
30. 551.25 (2) (b) of the statutes is amended to read:
AB831,12,62
551.25
(2) (b) If the division by rule or otherwise requires, a copy of the articles
3of incorporation and bylaws or their substantial equivalents currently in effect, a
4copy of any agreements with or among underwriters, a copy of any indenture or other
5instrument governing the issuance of the security to be registered, and a specimen
6or copy of the security
;.
AB831, s. 31
7Section
31. 551.25 (2) (c) of the statutes is amended to read:
AB831,12,98
551.25
(2) (c) If the division requires, any other information, or copies of any
9documents, filed under the
securities act Securities Act of 1933
; and.
AB831, s. 32
10Section
32. 551.29 of the statutes is created to read:
AB831,12,13
11551.29 Federal covered securities. (1) With respect to a federal covered
12security that is a covered security under section 18 (b) (2) of the Securities Act of
131933, the division may, by rule or order, require the filing of any of the following:
AB831,12,2314
(a) Not later than the initial offer of the federal covered security in this state,
15a copy of each document that is part of its registration statement filed with the
16federal securities and exchange commission under the Securities Act of 1933, which
17may, at the option of the issuer, be accompanied by a form containing the information
18specified by the division by rule. If a filing is required under this paragraph, the
19filing shall be accompanied by a consent to service of process signed by the issuer and
20a notice filing fee under s. 551.52 (1) (a). Any notice filing required under this
21paragraph is effective upon receipt by the division of the documents and fees required
22under this paragraph, or upon the effectiveness of the registration statement under
23the Securities Act of 1933, whichever is later.
AB831,13,924
(b) After the initial offer of a federal covered security in this state, a copy of each
25document that is part of an amendment to its registration statement filed with the
1federal securities and exchange commission under the Securities Act of 1933,
2concurrent with the federal filing, which may, at the option of the issuer, be
3accompanied by a form containing the information specified by the division by rule.
4If a filing is required under this paragraph and the amendment relates either to a
5name change of the issuer, or a change in the designation of the federal covered
6security, the filing shall be accompanied by a fee in the amount prescribed by the rule
7or order requiring the filing. Unless the issuer requests a later effective date, an
8amendment filing required under this paragraph is effective upon receipt by the
9division of the documents and fees required under this paragraph.
AB831,13,1210
(c) For a unit investment trust or closed-end investment company to extend its
11offering beyond a one-year period, a notice of extension, together with any filing fee
12prescribed by rule or order, at the time prescribed by rule or order.
AB831,13,17
13(1m) If the division promulgates rules under sub. (1) (c) for unit investment
14trusts or closed-end investment companies, the division shall restate in those rules
15the statutory annual reporting and fee requirements that are applicable to an
16open-end management company or a face amount certificate company under s.
17551.52 (1) (b) 2.
AB831,13,25
18(2) With respect to a federal covered security that is a covered security under
19section 18 (b) (4) (D) of the Securities Act of 1933, the division may, by rule or order,
20require the issuer to file a notice consisting of a completed Form D as prescribed by
21Rule 503 of Regulation D under the Securities Act of 1933, signed by the issuer, not
22later than 15 days after the first sale of the federal covered security in this state. Any
23filing required under this subsection shall be accompanied by a fee in the amount
24prescribed by the rule or order requiring the filing. The filing shall be effective upon
25receipt by the division of the filing and the fee.
AB831,14,7
1(3) With respect to a federal covered security that is a covered security under
2section 18 (b) (3) or (4) of the Securities Act of 1933, the division may, by rule or order,
3require the filing, for purpose of providing notice to the division, of any document
4filed with the federal securities and exchange commission under the the Securities
5Act of 1933, together with a fee prescribed in the rule or order. The filing is effective
6upon receipt by the division of the documents and fee required under the rule or
7order.
AB831,14,14
8(4) To the extent not prohibited by federal law, if the issuer of a federal covered
9security does not pay a fee required under this chapter with respect to that security
10and the nonpayment or underpayment of that fee has not been remedied within 10
11days of receipt by the issuer of a written or electronically transmitted notification
12from the division, the federal covered security may not be offered or sold in this state
13unless it is registered under this chapter or qualifies for an exemption from
14registration under s. 551.22 or 551.23.
AB831,14,22
15(5) The division may issue an order suspending offers and sales of a federal
16covered security in this state, except a federal covered security under section 18 (b)
17(1) of the Securities Act of 1933, if the order is in the public interest and the division
18has reason to believe that there has been a failure to comply with this section or a
19rule or order issued under this section. The division may issue an order suspending
20offers and sales of a federal covered security in this state if the order is in the public
21interest and the division has reason to believe that the security is being or has been
22offered or sold in this state in violation of s. 551.41.
AB831,14,24
23(6) The division may, by rule or order, waive any requirement under this section
24or under rules promulgated, or orders issued, under this section.
AB831, s. 33
1Section
33. Subchapter III (title) of chapter 551 [precedes 551.31] of the
2statutes is amended to read:
AB831,15,44
SUBCHAPTER III
AB831,15,85
LICENSING
OF And notice filing
6
procedures; BROKER-DEALERS,
7
AGENTS
AND, INVESTMENT ADVISERS
and
8
investment adviser representatives
AB831, s. 34
9Section
34. 551.31 (title) of the statutes is amended to read:
AB831,15,10
10551.31 (title)
Licensing requirement and notice filing requirements.
AB831, s. 35
11Section
35. 551.31 (1) of the statutes is repealed and recreated to read:
AB831,15,1712
551.31
(1) Unless exempt from licensing under this subsection, it is unlawful
13for any person to transact business in this state as a broker-dealer unless licensed
14under this chapter as a broker-dealer. Unless exempt from licensing under this
15subsection, it is unlawful for any person to transact business in this state as an agent
16unless licensed under this chapter as an agent. All of the following persons are
17exempt from licensing under this subsection:
AB831,15,2118
(c) A person who represents a broker-dealer in effecting transactions, if the
19person meets the requirements under section 15 (h) (2) of the Securities Exchange
20Act of 1934 and the person's transactions in this state are limited to those
21transactions described in section 15 (h) (3) of the Securities Exchange Act of 1934.
AB831, s. 36
22Section
36. 551.31 (1m) of the statutes is renumbered 551.31 (1) (a) and
23amended to read:
AB831,16,3
1551.31
(1) (a) A person who effects transactions in this state exclusively for the
2account of or exclusively in offers to sell or sales to persons specified in s. 551.23 (8)
3(a) to (f)
is not required to be licensed under this chapter as a broker-dealer or agent.
AB831,16,9
4(b) A person who gives a group presentation relating to an issuer or the
5securities of an issuer at a meeting or seminar sponsored by a broker-dealer licensed
6under this chapter
is not required to be licensed under this chapter as an agent, if
7the person makes no solicitations, offers or sales of the issuer's securities on an
8individual basis with any person in this state and if the person does not in any other
9way transact business in this state as an agent.
AB831, s. 37
10Section
37. 551.31 (2) (a) of the statutes is renumbered 551.31 (2) (a) (intro.)
11and amended to read:
AB831,16,1412
551.31
(2) (a) (intro.) It is unlawful for any broker-dealer or issuer to employ
13an agent to represent it in this state unless
the
at least one of the following conditions
14is met:
AB831,16,15
151. The agent is licensed for that broker-dealer or issuer in this state
, the.
AB831,16,17
162. The agent is
excluded exempted from the licensing requirement under sub.
17(1m) or the (1).
AB831,16,19
183. The agent is not required under sub. (7) to obtain a separate license to
19represent that issuer.
AB831, s. 38
20Section
38. 551.31 (2) (d) of the statutes is amended to read:
AB831,16,2521
551.31
(2) (d) When an agent
who is required to be licensed under sub. (1)
22terminates employment with a broker-dealer or issuer, or terminates those
23activities which make that individual an agent, or transfers employment between
24licensed broker-dealers, the agent, the broker-dealer or the issuer shall promptly
25file a notice in accordance with rules adopted by the division.
AB831, s. 39
1Section
39. 551.31 (3) of the statutes is repealed and recreated to read:
AB831,17,82
551.31
(3) Unless exempt from licensing under this subsection, it is unlawful
3for a person to transact business in this state as an investment adviser unless
4licensed under this chapter as an investment adviser. Unless exempt from licensing
5under this subsection, it is unlawful for a person to transact business in this state
6as an investment adviser representative for an investment adviser unless licensed
7under this chapter as an investment adviser representative. All of the following
8persons are exempt from licensing under this subsection:
AB831,17,99
(a) A person who is licensed as a broker-dealer under this chapter.
AB831,17,1110
(b) A person whose only clients in this state are persons described under s.
11551.23 (8) (a) to (f).
AB831,17,1412
(c) A person who has no place of business in this state and, during the preceding
1312-month period, has not had more than 5 clients who are residents of this state,
14exclusive of clients described under s. 551.23 (8) (a) to (f).
AB831, s. 40
15Section
40. 551.31 (4) of the statutes is repealed and recreated to read:
AB831,17,2016
551.31
(4) (a)
It is unlawful for any investment adviser who is required to be
17licensed under this chapter to employ an investment adviser representative to
18represent the investment adviser in this state, unless the investment adviser
19representative either is licensed for that investment adviser in this state or is a
20person described under sub. (3) (a), (b) or (c).
AB831,17,2521
(b) It is unlawful for any person having a place of business located in this state
22who is employed or supervised by, or is associated with, a federal covered adviser, to
23act as an investment adviser representative in this state, unless the investment
24adviser representative either is licensed in this state or is a person described under
25sub. (3) (a), (b) or (c).
AB831,18,4
1(c) 1. When an investment adviser representative licensed in this state
2employed by an investment adviser who is required to be licensed under this chapter
3terminates his or her employment, the investment adviser shall promptly file a
4notice with the division in accordance with rules promulgated by the division.
AB831,18,85
2. When an investment adviser representative licensed in this state employed
6by a federal covered adviser terminates his or her employment, the investment
7adviser representative shall promptly file a notice with the division in accordance
8with rules promulgated by the division.
AB831, s. 41
9Section
41. 551.31 (4m) of the statutes is created to read: