AB831: Bill Text

AB831,8,13 (b) The security or transaction is exempted under s. 551.22 or 551.23.

AB831, s. 16 Section 16. 551.21 (1) (c) of the statutes is created to read:

AB831,8,15 551.21 (1) (c) The security is a federal covered security.

AB831, s. 17 Section 17. 551.22 (7) of the statutes is amended to read:

AB831,9,2 551.22 (7) Any security listed, or approved for listing upon notice of issuance, on the New York stock exchange, the American stock exchange, or a securities exchange designated by rule of the division; any security designated, or approved for designation upon notice of issuance, as a national market system security by the national association of securities dealers, inc., subject to rules that the division may promulgate under this subsection; any security of the same issuer which is of senior or substantially equal rank to the security listed, designated or approved for listing or designation; any security called for by subscription rights or warrants so listed, approved or designated; or any warrant or right to purchase or subscribe to any of the foregoing.

AB831, s. 18 Section 18. 551.23 (3) (intro.) of the statutes is amended to read:

AB831,9,7 551.23 (3) (intro.) Any sale of any outstanding security by or on behalf of a person not the issuer and not in control of the issuer or controlled by the issuer or under common control with the issuer at a price reasonably related to the current market price if any of the following conditions are met:

AB831, s. 19 Section 19. 551.23 (3) (a) of the statutes is amended to read:

AB831,9,13 551.23 (3) (a) The issuer has any securities registered under section 12 of the securities exchange act Securities Exchange Act of 1934 or exempted from registration by section 12 (g) (2) (G) or 12 (g) (3) of that act, or the issuer is an investment company registered under the investment company act Investment Company Act of 1940; or.

AB831, s. 20 Section 20. 551.23 (3) (b) of the statutes is amended to read:

AB831,9,17 551.23 (3) (b) Securities of the same class have been registered under this chapter under a registration statement becoming effective within 2 years preceding the sale and the registration has not been revoked or suspended; or.

AB831, s. 21 Section 21. 551.23 (3) (c) of the statutes is amended to read:

AB831,9,25 551.23 (3) (c) Securities of the same class have been registered under the securities act Securities Act of 1933 and there is filed with the division prior to any offer or sale a notice of the proposed sale, other information as the division by rule requires and any additional information required under s. 551.24 (6), and the division does not by order disallow the exemption within 10 days after the date of filing the notice or, if additional information is required under s. 551.24 (6), within 10 days after the date of filing that information; or .

AB831, s. 22 Section 22. 551.23 (8) (b) and (c) of the statutes are amended to read:

AB831,10,5 551.23 (8) (b) A bank, savings institution, savings bank, credit union, trust company, insurer, broker-dealer, investment adviser, federal covered adviser or savings and loan association, if the purchaser or prospective purchaser is acting for itself or as trustee with investment control.

AB831,10,12 (c) An investment company as defined under 15 USC 80a-3 or a pension or profit-sharing trust, except that an offer or sale of a security to a pension or profit-sharing trust or to an individual retirement plan, including a self-employed individual retirement plan, is not exempt under this paragraph unless the trust or plan is administered by a bank, savings institution, savings bank, credit union, trust company, insurer, broker-dealer, investment adviser, federal covered adviser or savings and loan association that has investment control.

AB831, s. 23 Section 23. 551.23 (16) of the statutes is amended to read:

AB831,10,17 551.23 (16) Any offer, but not a sale, of a security for which registration statements have been filed under both this chapter and the securities act Securities Act of 1933 if no stop order or denial order is in effect and no proceeding is pending under either law.

AB831, s. 24 Section 24. 551.23 (19) (a) of the statutes is amended to read:

AB831,10,23 551.23 (19) (a) Any offer or sale of securities made in reliance on the exemptions exemption provided by Rule 505 or 506 of Regulation D under the securities act Securities Act of 1933 and the conditions and definitions provided by Rules 501 to 503 thereunder, if the offer or sale also satisfies the additional conditions and limitations in pars. (b) to (f).

AB831, s. 25 Section 25. 551.23 (19) (b) of the statutes is amended to read:

AB831,11,4 551.23 (19) (b) No commission or other remuneration may be paid or given, directly or indirectly, to any person for soliciting or selling to any person in this state in reliance on the exemption under par. (a), except to broker-dealers and agents licensed in this state or exempt from licensure under s. 551.31 (1).

AB831, s. 26 Section 26. 551.23 (19) (d) of the statutes is amended to read:

AB831,11,13 551.23 (19) (d) Not later than the earlier of the date on which the first use of an offering document or the first sale is made in this state in reliance on the exemption under par. (a), there is filed with the division a notice comprised of offering material in compliance with the requirements of Rule 502 of Regulation D under the securities act Securities Act of 1933, a completed Form D as prescribed by Rule 503 of Regulation D under the securities act Securities Act of 1933, and a fee of $200. Material amendments to the offering document shall be filed with the division not later than the date of their first use in this state.

AB831, s. 27 Section 27. 551.25 (1) of the statutes is amended to read:

AB831,11,17 551.25 (1) Registration by coordination may be used for any security for which a registration statement has been filed under the securities act Securities Act of 1933 in connection with the same offering and has not become effective.

AB831, s. 28 Section 28. 551.25 (2) (intro.) of the statutes is amended to read:

AB831,11,22 551.25 (2) (intro.)  A registration statement under this section shall contain all of the following information and be accompanied by the following documents in addition to the information specified in s. 551.27 (2) and the consent to service of process required by s. 551.65 (1):

AB831, s. 29 Section 29. 551.25 (2) (a) of the statutes is amended to read:

AB831,11,25 551.25 (2) (a) Three copies of the latest form of prospectus filed under the securities act Securities Act of 1933;.

AB831, s. 30 Section 30. 551.25 (2) (b) of the statutes is amended to read:

AB831,12,6 551.25 (2) (b) If the division by rule or otherwise requires, a copy of the articles of incorporation and bylaws or their substantial equivalents currently in effect, a copy of any agreements with or among underwriters, a copy of any indenture or other instrument governing the issuance of the security to be registered, and a specimen or copy of the security;.

AB831, s. 31 Section 31. 551.25 (2) (c) of the statutes is amended to read:

AB831,12,9 551.25 (2) (c) If the division requires, any other information, or copies of any documents, filed under the securities act Securities Act of 1933; and.

AB831, s. 32 Section 32. 551.29 of the statutes is created to read:

AB831,12,13 551.29 Federal covered securities. (1) With respect to a federal covered security that is a covered security under section 18 (b) (2) of the Securities Act of 1933, the division may, by rule or order, require the filing of any of the following:

AB831,12,23 (a) Not later than the initial offer of the federal covered security in this state, a copy of each document that is part of its registration statement filed with the federal securities and exchange commission under the Securities Act of 1933, which may, at the option of the issuer, be accompanied by a form containing the information specified by the division by rule. If a filing is required under this paragraph, the filing shall be accompanied by a consent to service of process signed by the issuer and a notice filing fee under s. 551.52 (1) (a). Any notice filing required under this paragraph is effective upon receipt by the division of the documents and fees required under this paragraph, or upon the effectiveness of the registration statement under the Securities Act of 1933, whichever is later.

AB831,13,9 (b) After the initial offer of a federal covered security in this state, a copy of each document that is part of an amendment to its registration statement filed with the federal securities and exchange commission under the Securities Act of 1933, concurrent with the federal filing, which may, at the option of the issuer, be accompanied by a form containing the information specified by the division by rule. If a filing is required under this paragraph and the amendment relates either to a name change of the issuer, or a change in the designation of the federal covered security, the filing shall be accompanied by a fee in the amount prescribed by the rule or order requiring the filing. Unless the issuer requests a later effective date, an amendment filing required under this paragraph is effective upon receipt by the division of the documents and fees required under this paragraph.

AB831,13,12 (c) For a unit investment trust or closed-end investment company to extend its offering beyond a one-year period, a notice of extension, together with any filing fee prescribed by rule or order, at the time prescribed by rule or order.

AB831,13,17 (1m) If the division promulgates rules under sub. (1) (c) for unit investment trusts or closed-end investment companies, the division shall restate in those rules the statutory annual reporting and fee requirements that are applicable to an open-end management company or a face amount certificate company under s. 551.52 (1) (b) 2.

AB831,13,25 (2) With respect to a federal covered security that is a covered security under section 18 (b) (4) (D) of the Securities Act of 1933, the division may, by rule or order, require the issuer to file a notice consisting of a completed Form D as prescribed by Rule 503 of Regulation D under the Securities Act of 1933, signed by the issuer, not later than 15 days after the first sale of the federal covered security in this state. Any filing required under this subsection shall be accompanied by a fee in the amount prescribed by the rule or order requiring the filing. The filing shall be effective upon receipt by the division of the filing and the fee.

AB831,14,7 (3) With respect to a federal covered security that is a covered security under section 18 (b) (3) or (4) of the Securities Act of 1933, the division may, by rule or order, require the filing, for purpose of providing notice to the division, of any document filed with the federal securities and exchange commission under the the Securities Act of 1933, together with a fee prescribed in the rule or order. The filing is effective upon receipt by the division of the documents and fee required under the rule or order.

AB831,14,14 (4) To the extent not prohibited by federal law, if the issuer of a federal covered security does not pay a fee required under this chapter with respect to that security and the nonpayment or underpayment of that fee has not been remedied within 10 days of receipt by the issuer of a written or electronically transmitted notification from the division, the federal covered security may not be offered or sold in this state unless it is registered under this chapter or qualifies for an exemption from registration under s. 551.22 or 551.23.

AB831,14,22 (5) The division may issue an order suspending offers and sales of a federal covered security in this state, except a federal covered security under section 18 (b) (1) of the Securities Act of 1933, if the order is in the public interest and the division has reason to believe that there has been a failure to comply with this section or a rule or order issued under this section. The division may issue an order suspending offers and sales of a federal covered security in this state if the order is in the public interest and the division has reason to believe that the security is being or has been offered or sold in this state in violation of s. 551.41.

AB831,14,24 (6) The division may, by rule or order, waive any requirement under this section or under rules promulgated, or orders issued, under this section.

AB831, s. 33 Section 33. Subchapter III (title) of chapter 551 [precedes 551.31] of the statutes is amended to read:

AB831,15,3 CHAPTER 551

AB831,15,4 SUBCHAPTER III

AB831,15,8 LICENSING OF And notice filing procedures; BROKER-DEALERS, AGENTS AND, INVESTMENT ADVISERS and investment adviser representatives

AB831, s. 34 Section 34. 551.31 (title) of the statutes is amended to read:

AB831,15,10 551.31 (title) Licensing requirement and notice filing requirements.

AB831, s. 35 Section 35. 551.31 (1) of the statutes is repealed and recreated to read:

AB831,15,17 551.31 (1) Unless exempt from licensing under this subsection, it is unlawful for any person to transact business in this state as a broker-dealer unless licensed under this chapter as a broker-dealer. Unless exempt from licensing under this subsection, it is unlawful for any person to transact business in this state as an agent unless licensed under this chapter as an agent. All of the following persons are exempt from licensing under this subsection:

AB831,15,21 (c) A person who represents a broker-dealer in effecting transactions, if the person meets the requirements under section 15 (h) (2) of the Securities Exchange Act of 1934 and the person's transactions in this state are limited to those transactions described in section 15 (h) (3) of the Securities Exchange Act of 1934.

AB831, s. 36 Section 36. 551.31 (1m) of the statutes is renumbered 551.31 (1) (a) and amended to read:

AB831,16,3 551.31 (1) (a) A person who effects transactions in this state exclusively for the account of or exclusively in offers to sell or sales to persons specified in s. 551.23 (8) (a) to (f) is not required to be licensed under this chapter as a broker-dealer or agent.

AB831,16,9 (b) A person who gives a group presentation relating to an issuer or the securities of an issuer at a meeting or seminar sponsored by a broker-dealer licensed under this chapter is not required to be licensed under this chapter as an agent, if the person makes no solicitations, offers or sales of the issuer's securities on an individual basis with any person in this state and if the person does not in any other way transact business in this state as an agent.

AB831, s. 37 Section 37. 551.31 (2) (a) of the statutes is renumbered 551.31 (2) (a) (intro.) and amended to read:

AB831,16,14 551.31 (2) (a) (intro.) It is unlawful for any broker-dealer or issuer to employ an agent to represent it in this state unless the at least one of the following conditions is met:

AB831,16,15 1. The agent is licensed for that broker-dealer or issuer in this state, the.

AB831,16,17 2. The agent is excluded exempted from the licensing requirement under sub. (1m) or the (1).

AB831,16,19 3. The agent is not required under sub. (7) to obtain a separate license to represent that issuer.

AB831, s. 38 Section 38. 551.31 (2) (d) of the statutes is amended to read:

AB831,16,25 551.31 (2) (d) When an agent who is required to be licensed under sub. (1) terminates employment with a broker-dealer or issuer, or terminates those activities which make that individual an agent, or transfers employment between licensed broker-dealers, the agent, the broker-dealer or the issuer shall promptly file a notice in accordance with rules adopted by the division.

AB831, s. 39 Section 39. 551.31 (3) of the statutes is repealed and recreated to read:

AB831,17,8 551.31 (3) Unless exempt from licensing under this subsection, it is unlawful for a person to transact business in this state as an investment adviser unless licensed under this chapter as an investment adviser. Unless exempt from licensing under this subsection, it is unlawful for a person to transact business in this state as an investment adviser representative for an investment adviser unless licensed under this chapter as an investment adviser representative. All of the following persons are exempt from licensing under this subsection:

AB831,17,9 (a) A person who is licensed as a broker-dealer under this chapter.

AB831,17,11 (b) A person whose only clients in this state are persons described under s. 551.23 (8) (a) to (f).

AB831,17,14 (c) A person who has no place of business in this state and, during the preceding 12-month period, has not had more than 5 clients who are residents of this state, exclusive of clients described under s. 551.23 (8) (a) to (f).

AB831, s. 40 Section 40. 551.31 (4) of the statutes is repealed and recreated to read:

AB831,17,20 551.31 (4) (a) It is unlawful for any investment adviser who is required to be licensed under this chapter to employ an investment adviser representative to represent the investment adviser in this state, unless the investment adviser representative either is licensed for that investment adviser in this state or is a person described under sub. (3) (a), (b) or (c).

AB831,17,25 (b) It is unlawful for any person having a place of business located in this state who is employed or supervised by, or is associated with, a federal covered adviser, to act as an investment adviser representative in this state, unless the investment adviser representative either is licensed in this state or is a person described under sub. (3) (a), (b) or (c).

AB831,18,4 (c) 1. When an investment adviser representative licensed in this state employed by an investment adviser who is required to be licensed under this chapter terminates his or her employment, the investment adviser shall promptly file a notice with the division in accordance with rules promulgated by the division.

AB831,18,8 2. When an investment adviser representative licensed in this state employed by a federal covered adviser terminates his or her employment, the investment adviser representative shall promptly file a notice with the division in accordance with rules promulgated by the division.

AB831, s. 41 Section 41. 551.31 (4m) of the statutes is created to read:

AB831,18,12 551.31 (4m) It is unlawful for any federal covered adviser to transact investment advisory business in this state unless one of the following conditions is met:

AB831,18,14 (a) The federal covered adviser's only clients who are residents of this state are described under s. 551.23 (8) (a) to (f).

AB831,18,18 (b) The federal covered adviser has no place of business in this state, and, during the preceding 12-month period, the adviser has not had more than 5 clients who are residents of this state, exclusive of clients described under s. 551.23 (8) (a) to (f).

AB831,18,20 (c) The federal covered adviser has complied with the notice filing provisions under s. 551.32 (1m).

AB831, s. 42 Section 42. 551.32 (title) of the statutes is amended to read:

AB831,18,22 551.32 (title) Licensing and notice filing procedure.

AB831, s. 43 Section 43. 551.32 (1) (a) of the statutes is amended to read:

AB831,19,2 551.32 (1) (a) A broker-dealer, agent or , investment adviser or investment adviser representative may obtain an initial or renewal license by filing with the division, or an organization which the division by rule designates, an application together with a consent to service of process under s. 551.65 (1).

AB831, s. 44 Section 44. 551.32 (1) (b) of the statutes is amended to read:

AB831,19,15 551.32 (1) (b) An application under par. (a) shall contain whatever information the division by rule requires concerning the applicant's form and place of organization, proposed method of doing business and financial condition, the qualifications and experience business history of the applicant, including, in the case of a broker-dealer or investment adviser, the qualifications and experience business history of any partner, officer, director, or any person occupying a similar status or performing similar functions or any controlling person, any injunction or administrative order or conviction of a misdemeanor involving securities and any conviction of a felony, and any other matters which the division determines are relevant to the application. The division may by rule or order require an applicant for an initial license to publish an announcement of the application in one or more specified newspapers published in this state.

AB831, s. 45 Section 45. 551.32 (1) (d) of the statutes is renumbered 551.32 (1s) and amended to read:

AB831,19,20 551.32 (1s) The division shall cooperate with other securities administrators and regulatory authorities to simplify and coordinate license application, notice filing and renewal procedures.

AB831, s. 46 Section 46. 551.32 (1m) of the statutes is created to read:

AB831,20,2 551.32 (1m) (a) If required under s. 551.31 (4m), a federal covered adviser shall file with the division a notice filing together with the fee prescribed under s. 551.52 (2). The notice filing shall consist either of a notice filing form prescribed by the division by rule or a copy of those documents that have been filed with the federal securities and exchange commission as the division, by rule or order, may require.