AB816,27,3
1(25) "Record," except in the phrases "of record," "official record," and "public
2record," means information that is inscribed on a tangible medium or that is stored
3in an electronic or other medium and is retrievable in perceivable form.
AB816,27,7
4(26) "Sale" includes every contract of sale, contract to sell, or disposition of a
5security or interest in a security for value, and "offer to sell" includes every attempt
6or offer to dispose of, or solicitation of an offer to purchase, a security or interest in
7a security for value. Both terms include all of the following:
AB816,27,108
(a) A security given or delivered with, or as a bonus on account of, a purchase
9of securities or any other thing constituting part of the subject of the purchase and
10having been offered and sold for value.
AB816,27,1111
(b) A gift of assessable stock involving an offer and sale.
AB816,27,1512
(c) A sale or offer of a warrant or right to purchase or subscribe to another
13security of the same or another issuer and a sale or offer of a security that gives the
14holder a present or future right or privilege to convert the security into another
15security of the same or another issuer, including an offer of the other security.
AB816,27,17
16(27) "Securities and Exchange Commission" means the United States
17Securities and Exchange Commission.
AB816,28,5
18(28) "Security" means a note; stock; treasury stock; security future; bond;
19debenture; evidence of indebtedness; limited partnership interest; viatical
20settlement investment or similar agreement; certificate of interest or participation
21in a profit-sharing agreement; collateral trust certificate; preorganization
22certificate or subscription; transferable share; investment contract; voting trust
23certificate; certificate of deposit for a security; fractional undivided interest in oil,
24gas, or other mineral rights; put, call, straddle, option, or privilege on a security,
25certificate of deposit, or group or index of securities, including an interest therein or
1based on the value thereof; put, call, straddle, option, or privilege entered into on a
2national securities exchange relating to foreign currency; or, in general, an interest
3or instrument commonly known as a "security"; or a certificate of interest or
4participation in, temporary or interim certificate for, receipt for, guarantee of, or
5warrant or right to subscribe to or purchase, any of the foregoing. The term:
AB816,28,66
(a) Includes both a certificated and an uncertificated security.
AB816,28,97
(b) Does not include an insurance or endowment policy or annuity contract
8under which an insurance company promises to pay a fixed or variable sum of money
9either in a lump sum or periodically for life or other specified period.
AB816,28,1110
(c) Does not include an interest in a contributory or noncontributory pension
11or welfare plan subject to the Employee Retirement Income Security Act of 1974.
AB816,28,1212
(d) Subject to the exception in par. (e), includes all of the following:
AB816,28,1713
1. An investment in a common enterprise with the expectation of profits to be
14derived through the essential managerial efforts of someone other than the investor.
15For purposes of this subdivision, a "common enterprise" is an enterprise in which the
16fortunes of the investor are tied to the efficacy of the efforts of those seeking the
17investment or a third party.
AB816,28,2418
2. Any investment by which an offeree furnishes initial value to an offeror, and
19a portion of this initial value is subjected to the risks of the enterprise, and the
20furnishing of the initial value is induced by the offeror's promises or representations
21which give rise to a reasonable understanding that a valuable benefit of some kind
22over and above the initial value will accrue to the offeree as a result of the operation
23of the enterprise, and the offeree does not receive the right to exercise practical and
24actual control over the managerial decisions of the enterprise.
AB816,29,4
1(e) Includes as an "investment contract," among other contracts, an interest in
2a limited liability partnership and in a limited liability company; except an interest,
3or class or series thereof, in a limited liability partnership or limited liability
4company is not an "investment contract" if any of the following apply:
AB816,29,115
1. Each holder of an interest, or class or series thereof, is actively engaged in
6the management of the limited liability partnership or limited liability company.
7However, evidence that partners or members vote or have the right to vote, or the
8right to information concerning the business and affairs of the limited liability
9partnership or limited liability company, or the right to participate in management,
10shall not establish, without more, that all partners or members are actively engaged
11in the management of the limited liability partnership or limited liability company.
AB816,29,1612
2. Each holder of an interest, or class or series thereof, is authorized under
13applicable law or under the partnership, operating, or other governing agreement or
14document to act for and bind the limited liability partnership or limited liability
15company and the total number of holders of all interests in the limited liability
16partnership or limited liability company does not exceed 15.
AB816,29,1817
(f) Does not include a time share created and marketed in accordance with ch.
18707 if the requirements under s. 707.11 are satisfied.
AB816,29,2019
(g) Does not include a membership interest in a domestic mutual holding
20company, as provided under s. 644.22.
AB816,29,2221
(h) Does not include as an "investment contract" any contract excluded by rule
22adopted or order issued under this chapter.
AB816,30,3
23(29) "Self-regulatory organization" means a national securities exchange
24registered under the Securities Exchange Act of 1934, a national securities
25association of broker-dealers registered under the Securities Exchange Act of 1934,
1a clearing agency registered under the Securities Exchange Act of 1934, or the
2Municipal Securities Rulemaking Board established under the Securities Exchange
3Act of 1934.
AB816,30,5
4(30) "Sign" means to do any of the following, with present intent to
5authenticate or adopt a record:
AB816,30,66
(a) To execute or adopt a tangible symbol.
AB816,30,87
(b) To attach or logically associate with the record an electronic symbol, sound,
8or process.
AB816,30,11
9(31) "State" means a state of the United States, the District of Columbia,
10Puerto Rico, the United States Virgin Islands, or any territory or insular possession
11subject to the jurisdiction of the United States.
AB816,30,15
12(32) "Viatical settlement investment" means the entire interest or any
13fractional or pool interest in a life insurance policy or certificate of insurance or in
14the death benefit thereunder that is the subject of a viatical settlement, as defined
15in s. 632.68 (1) (b), but does not include any of the following:
AB816,30,1816
(a) The assignment, transfer, sale, devise or bequest of a death benefit, life
17insurance policy, or certificate of insurance by the viator to a viatical settlement
18provider pursuant to s. 632.68.
AB816,30,2019
(b) The exercise of accelerated benefits pursuant to the life insurance policy or
20certificate and consistent with applicable law.
AB816,31,7
21551.103 References to federal statutes. "Securities Act of 1933" (
15 USC
2277a et seq.), "Securities Exchange Act of 1934" (
15 USC 78a et seq.), "Public Utility
23Holding Company Act of 1935" (
15 USC 79 et seq.), "Investment Company Act of
241940" (
15 USC 80a-1 et seq.), "Investment Advisers Act of 1940" (
15 USC 80b-1 et
25seq.), "Employee Retirement Income Security Act of 1974" (
29 USC 1001 et seq.),
1"National Housing Act" (
12 USC 1701 et seq.), "Commodity Exchange Act" (
7 USC
21 et seq.), "Internal Revenue Code" (
26 USC 1 et seq.), "Securities Investor Protection
3Act of 1970" (
15 USC 78aaa et seq.), "Securities Litigation Uniform Standards Act
4of 1998" (112 Stat. 3227), "Small Business Investment Act of 1958" (
15 USC 661 et
5seq.), and "Electronic Signatures in Global and National Commerce Act" (
15 USC
67001 et seq.) mean those statutes and the rules and regulations adopted under those
7statutes, as in effect on the date of enactment of this chapter, or as later amended.
AB816,31,10
8551.104 References to federal agencies. A reference in this chapter to an
9agency or department of the United States is also a reference to a successor agency
10or department.
AB816,31,18
11551.105 Electronic records and signatures. This chapter modifies, limits,
12and supersedes the federal Electronic Signatures in Global and National Commerce
13Act, but does not modify, limit, or supersede section 101 (c) of that act (
15 USC 7001 14(c)) or authorize electronic delivery of any of the notices described in section 103 (b)
15of that act (
15 USC 7003 (b)). This chapter authorizes the filing of records and
16signatures, when specified by provisions of this chapter or by a rule adopted or order
17issued under this chapter, in a manner consistent with section 104 (a) of that act (
15
18USC 7004 (a)).
AB816,31,2119
subchapter ii
20
EXEMPTIONS FROM REGISTRATION
21
OF SECURITIES
AB816,31,23
22551.201 Exempt securities. The following securities are exempt from the
23requirements of ss. 551.301 to 551.306 and 551.504:
AB816,32,8
24(1) (a) A security, including a revenue obligation or a separate security as
25defined in Rule 131 (
17 CFR 230.131) adopted under the Securities Act of 1933,
1issued, insured, or guaranteed by the United States; by a state; by a political
2subdivision of a state; by a public authority, agency, or instrumentality of one or more
3states; by a political subdivision of one or more states; or by a person controlled or
4supervised by and acting as an instrumentality of the United States under authority
5granted by the Congress; or a certificate of deposit for any of the foregoing but any
6revenue obligation payable from payments to be made in respect of property or
7money used under a lease, sale, or loan arrangement by or for a nongovernmental
8industrial or commercial enterprise is exempt only as provided under par. (b).
AB816,32,199
(b) Unless subject to a letter of credit of a bank, savings bank, or savings and
10loan association as provided in this paragraph, a revenue obligation of an issuer
11specified under par. (a) that is payable from payments to be made in respect of
12property or money used under a lease, sale, or loan arrangement by or for a
13nongovernmental industrial or commercial enterprise is exempt subject to rules
14adopted by the division of securities. A revenue obligation is exempt from any filing
15under the rules of the division if it is the subject of a guarantee or an irrevocable letter
16of credit from a depository institution in favor of holders of the revenue obligations
17providing for payment of all principal of the revenue obligations and all accrued and
18unpaid interest to the date of an event of default on the revenue obligations, and the
19letter of credit is accompanied by an opinion of counsel stating all of the following:
AB816,32,2420
1. Either that payment of debt service will not constitute a preference under
21federal bankruptcy law if a petition in bankruptcy with respect to the enterprise is
22filed or that the guarantee or letter of credit will provide for reimbursement to
23holders of the revenue obligations if they are required by order of a federal
24bankruptcy court to disgorge as a preference any payment of a debt service.
AB816,33,4
12. That the enforceability of the guarantee or letter of credit would not be
2materially affected by the filing of a petition under federal bankruptcy law with
3respect to the enterprise or any person obligated to reimburse the depository
4institution for payments made under the guarantee or letter of credit.
AB816,33,8
5(2) A security issued, insured, or guaranteed by a foreign government with
6which the United States maintains diplomatic relations, or any of its political
7subdivisions, if the security is recognized as a valid obligation by the issuer, insurer,
8or guarantor.
AB816,33,10
9(3) A security issued by and representing or that will represent an interest in
10or a direct obligation of, or be guaranteed by, any of the following:
AB816,33,1111
(a) An international banking institution.
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(b) A banking institution organized under the laws of the United States; a
13member bank of the Federal Reserve System; or a depository institution a
14substantial portion of the business of which consists or will consist of receiving
15deposits or share accounts that are insured to the maximum amount authorized by
16statute by the Federal Deposit Insurance Corporation, the National Credit Union
17Share Insurance Fund, or a successor authorized by federal law or exercising
18fiduciary powers that are similar to those permitted for national banks under the
19authority of the Comptroller of Currency pursuant to Section 1 of Public Law 87-722
20(
12 USC 92a).
AB816,33,2221
(c) Any other depository institution, unless by rule or order the administrator
22proceeds under s. 551.204.
AB816,33,24
23(4) A security issued by and representing an interest in, or a debt of, or insured
24or guaranteed by, an insurance company authorized to do business in this state.
AB816,34,2
1(5) A security issued or guaranteed by a railroad, other common carrier, public
2utility, or public utility holding company that is any of the following:
AB816,34,33
(a) Regulated in respect to its rates and charges by the United States or a state.
AB816,34,54
(b) Regulated in respect to the issuance or guarantee of the security by the
5United States, a state, Canada, or a Canadian province or territory.
AB816,34,86
(c) A public utility holding company registered under the Public Utility Holding
7Company Act of 1935 or a subsidiary of such a registered holding company within the
8meaning of that act.
AB816,34,22
9(6) A federal covered security specified in section 18 (b) (1) of the Securities Act
10of 1933 (
15 USC 77r (b) (1)) or by rule adopted under that provision or a security listed
11or approved for listing on another securities market specified by rule under this
12chapter; a put or a call option contract; a warrant; a subscription right on or with
13respect to such securities; or an option or similar derivative security on a security or
14an index of securities or foreign currencies issued by a clearing agency registered
15under the Securities Exchange Act of 1934 and listed or designated for trading on a
16national securities exchange, a facility of a national securities exchange, or a facility
17of a national securities association registered under the Securities Exchange Act of
181934 or an offer or sale, of the underlying security in connection with the offer, sale,
19or exercise of an option or other security that was exempt when the option or other
20security was written or issued; or an option or a derivative security designated by the
21Securities and Exchange Commission under section 9 (b) of the Securities Exchange
22Act of 1934 (
15 USC 78i (b)).
AB816,35,10
23(7) A security issued by a person organized and operated exclusively for
24religious, educational, benevolent, fraternal, charitable, social, athletic, or
25reformatory purposes, or as a chamber of commerce, and not for pecuniary profit, no
1part of the net earnings of which inures to the benefit of a private stockholder or other
2person, or a security of a company that is excluded from the definition of an
3investment company under section 3 (c) (10) (B) of the Investment Company Act of
41940 (
15 USC 80a-3 (c) (10) (B)); except that with respect to the offer or sale of a note,
5bond, debenture, or other evidence of indebtedness issued by such a person, a rule
6may be adopted under this chapter limiting the availability of this exemption by
7classifying securities, persons, and transactions, imposing different requirements
8for different classes, specifying with respect to par. (b) the scope of the exemption and
9the grounds for denial or suspension, and requiring an issuer to do any of the
10following:
AB816,35,1411
(a) To file a notice specifying the material terms of the proposed offer or sale
12and copies of any proposed sales and advertising literature to be used and provide
13that the exemption becomes effective if the administrator does not disallow the
14exemption within the period established by the rule.
AB816,35,1915
(b) To file a request for exemption authorization for which a rule under this
16chapter may specify the scope of the exemption, the requirement of an offering
17statement, the filing of sales and advertising literature, the filing of consent to
18service of process complying with s. 551.611, and grounds for denial or suspension
19of the exemption.
AB816,35,2020
(c) To register under s. 551.304.
AB816,35,25
21(8) A member's or owner's interest in, or a retention certificate or like security
22given in lieu of a cash patronage dividend issued by, a cooperative organized and
23operated as a nonprofit membership cooperative under the cooperative laws of a
24state, but not a member's or owner's interest, retention certificate, or like security
25sold to persons other than bona fide members of the cooperative.
AB816,36,4
1(9) An equipment trust certificate with respect to equipment leased or
2conditionally sold to a person, if any security issued by the person would be exempt
3under this section or would be a federal covered security under section 18 (b) (1) of
4the Securities Act of 1933 (
15 USC 77r (b) (1)).
AB816,36,6
5551.202 Exempt transactions. The following transactions are exempt from
6the requirements of ss. 551.301 to 551.306 and 551.504:
AB816,36,8
7(1) An isolated nonissuer transaction, whether effected by or through a
8broker-dealer or not.
AB816,36,13
9(2) A nonissuer transaction by or through a broker-dealer registered or exempt
10from registration under this chapter, and a resale transaction by a sponsor of a unit
11investment trust registered under the Investment Company Act of 1940, in a
12security of a class that has been outstanding in the hands of the public for at least
1390 days if, at the date of the transaction, all of the following apply:
AB816,36,1814
(a) The issuer of the security is engaged in business, the issuer is not in the
15organizational stage or in bankruptcy or receivership, and the issuer is not a blank
16check, blind pool, or shell company that has no specific business plan or purpose or
17has indicated that its primary business plan is to engage in a merger or combination
18of the business with, or an acquisition of, an unidentified person.
AB816,36,1919
(b) The security is sold at a price reasonably related to its current market price.
AB816,36,2220
(c) The security does not constitute the whole or part of an unsold allotment to,
21or a subscription or participation by, the broker-dealer as an underwriter of the
22security or a redistribution.
AB816,37,223
(d) A nationally recognized securities manual or its electronic equivalent
24designated by rule adopted or order issued under this chapter or a record filed with
1the Securities and Exchange Commission that is publicly available contains all of the
2following:
AB816,37,33
1. A description of the business and operations of the issuer.
AB816,37,54
2. The names of the issuer's executive officers and the names of the issuer's
5directors, if any.
AB816,37,96
3. An audited balance sheet of the issuer as of a date within 18 months before
7the date of the transaction or, in the case of a reorganization or merger when the
8parties to the reorganization or merger each had an audited balance sheet, a pro
9forma balance sheet for the combined organization.
AB816,37,1310
4. An audited income statement for each of the issuer's 2 immediately previous
11fiscal years or for the period of existence of the issuer, whichever is shorter, or, in the
12case of a reorganization or merger when each party to the reorganization or merger
13had audited income statements, a pro forma income statement.
AB816,37,1414
(e) Any of the following requirements is met:
AB816,37,1815
1. The issuer of the security has a class of equity securities listed on a national
16securities exchange registered under section 6 of the Securities Exchange Act of 1934
17or designated for trading on the National Association of Securities Dealers
18Automated Quotation System.
AB816,37,2019
2. The issuer of the security is a unit investment trust registered under the
20Investment Company Act of 1940.
AB816,37,2221
3. The issuer of the security, including its predecessors, has been engaged in
22continuous business for at least 3 years.
AB816,38,223
4. The issuer of the security has total assets of at least $2,000,000 based on an
24audited balance sheet as of a date within 18 months before the date of the transaction
25or, in the case of a reorganization or merger when the parties to the reorganization
1or merger each had such an audited balance sheet, a pro forma balance sheet for the
2combined organization.
AB816,38,6
3(3) A nonissuer transaction by or through a broker-dealer registered or exempt
4from registration under this chapter in a security of a foreign issuer that is a margin
5security defined in regulations or rules adopted by the Board of Governors of the
6Federal Reserve System.
AB816,38,11
7(4) A nonissuer transaction by or through a broker-dealer registered or exempt
8from registration under this chapter in an outstanding security if the guarantor of
9the security files reports with the Securities and Exchange Commission under the
10reporting requirements of section 13 or 15 (d) of the Securities Exchange Act of 1934
11(
15 USC 78m or
78o (d)).
AB816,38,14
12(5) A nonissuer transaction by or through a broker-dealer registered or exempt
13from registration under this chapter in a security to which any of the following
14applies:
AB816,38,1615
(a) The security is rated at the time of the transaction by a nationally
16recognized statistical rating organization in one of its 4 highest rating categories.
AB816,38,1817
(b) The security has a fixed maturity or a fixed interest or dividend, if all of the
18following apply:
AB816,38,2119
1. A default has not occurred during the current fiscal year or within the 3
20previous fiscal years, or during the existence of the issuer and any predecessor if less
21than 3 fiscal years, in the payment of principal, interest, or dividends on the security.
AB816,39,222
2. The issuer is engaged in business, is not in the organizational stage or in
23bankruptcy or receivership, and is not and has not been within the previous 12
24months a blank check, blind pool, or shell company that has no specific business plan
1or purpose or has indicated that its primary business plan is to engage in a merger
2or combination of the business with, or an acquisition of, an unidentified person.
AB816,39,7
3(6) A nonissuer transaction by or through a broker-dealer registered or exempt
4from registration under this chapter effecting an unsolicited order or offer to
5purchase, but with respect to a nonissuer transaction involving a security that is not
6a federal covered security the administrator may require by rule that the records of
7the broker-dealer confirm that the order or offer to purchase was unsolicited.
AB816,39,9
8(7) A nonissuer transaction executed by a bona fide pledgee without the
9purpose of evading this chapter.
AB816,39,12
10(8) A nonissuer transaction by a federal covered investment adviser with
11investments under management in excess of $100,000,000 acting in the exercise of
12discretionary authority in a signed record for the account of others.
AB816,39,18
13(9) A transaction in a security, whether or not the security or transaction is
14otherwise exempt, in exchange for one or more bona fide outstanding securities,
15claims, or property interests, or partly in such exchange and partly for cash, if the
16terms and conditions of the issuance and exchange or the delivery and exchange and
17the fairness of the terms and conditions have been approved by the administrator
18after a hearing.
AB816,39,20
19(10) A transaction between the issuer or other person on whose behalf the
20offering is made and an underwriter, or among underwriters.
AB816,39,22
21(11) A transaction in a note, bond, debenture, or other evidence of indebtedness
22secured by a mortgage or other security agreement if all of the following apply:
AB816,39,2423
(a) The note, bond, debenture, or other evidence of indebtedness is offered and
24sold with the mortgage or other security agreement as a unit.
AB816,40,2
1(b) A general solicitation or general advertisement of the transaction is not
2made.
AB816,40,53
(c) A commission or other remuneration is not paid or given, directly or
4indirectly, to a person not registered under this chapter as a broker-dealer or as an
5agent.
AB816,40,7
6(12) A transaction by an executor, administrator of an estate, sheriff, marshal,
7receiver, trustee in bankruptcy, guardian, or conservator.
AB816,40,8
8(13) A sale or offer to sell to any of the following:
AB816,40,99
(a) An institutional investor.
AB816,40,1710
(am) An accredited investor, as defined in Rule 501 (a) adopted under the
11Securities Act of 1933 (
17 CFR 230.501 (a)), provided that prior to the sale in this
12state to an accredited investor described in Rule 501 (a) (5) or (6) adopted under the
13Securities Act of 1933, the seller files a consent to service of process with the
14administrator in the form required under s. 551.611. Failure to file the consent as
15required is a cause for administrative action by the administrator under s. 551.604
16but does not result in the loss of this exemption. This consent is not required to be
17filed if any of the following apply: