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.
AB816,33,2012
(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:
AB816,40,1918
1. The issuer of the securities to be sold has its principal place of business or
19a majority of its full-time employees located in this state.
AB816,40,2120
2. The issuer or seller of the securities files or has previously filed a consent to
21service of process with the administrator.
AB816,40,2322
3. The seller is a broker-dealer or agent of the issuer registered under this
23chapter.
AB816,40,2424
(b) A federal covered investment adviser.
AB816,41,2
1(c) Any other person exempted by rule adopted or order issued under this
2chapter.
AB816,41,7
3(14) (a) Subject to par. (b), any transaction pursuant to an offer directed by the
4offeror to not more than 25 persons in this state excluding those persons designated
5in sub. (13) but including persons exempt under sub. (24), during any period of 12
6consecutive months whether or not the offeror or any of the offerees is then present
7in this state if all of the following apply:
AB816,41,98
1. No general solicitation or general advertising is made in connection with the
9offer to sell or sale of the securities unless it has been permitted by the administrator.
AB816,41,1310
2. No commission or other remuneration is paid or given, directly or indirectly,
11to a person other than a broker-dealer registered under this chapter or an agent
12registered under this chapter for soliciting any person in this state other than those
13persons designated in sub. (13).
AB816,41,1514
3. The offeror reasonably believes that all the purchasers in this state, other
15than those designated in sub. (13), are purchasing for investment.
AB816,41,1916
(b) The administrator may by rule or order, as to any security or transaction
17or any type of security or transaction, withdraw or further condition this exemption,
18or increase or decrease the number of offerees permitted, or waive the conditions in
19par. (a), and may require reports of sales under this exemption.
AB816,42,6
20(15) A transaction under an offer to existing security holders of the issuer,
21including persons that at the date of the transaction are holders of convertible
22securities, options, or warrants, if a commission or other remuneration, other than
23a standby commission, is not paid or given, directly or indirectly, for soliciting a
24security holder in this state and if, prior to any offer or sale of any security that is
25not a federal covered security, the issuer files a notice specifying the terms of the offer,
1all other information that the administrator by rule requires, and any additional
2information reasonably related to the offering required to be filed by the
3administrator within 10 days after the filing date of the notice, and the administrator
4does not by order disallow the exemption within 10 days after the date of filing the
5notice or, if additional information is required, within 10 days after the date of filing
6that information.
AB816,42,8
7(16) An offer to sell, but not a sale, of a security not exempt from registration
8under the Securities Act of 1933 if all of the following apply:
AB816,42,119
(a) A registration or offering statement or similar record as required under the
10Securities Act of 1933 has been filed, but is not effective, or the offer is made in
11compliance with Rule 165 adopted under the Securities Act of 1933 (
17 CFR 230.165).
AB816,42,1512
(b) A stop order of which the offeror is aware has not been issued against the
13offeror by the administrator or the Securities and Exchange Commission, and an
14audit, inspection, or proceeding that is public and that may culminate in a stop order
15is not known by the offeror to be pending.
AB816,42,17
16(17) An offer to sell, but not a sale, of a security exempt from registration under
17the Securities Act of 1933 if all of the following apply:
AB816,42,1918
(a) A registration statement has been filed under this chapter, but is not
19effective.
AB816,42,2120
(b) A solicitation of interest is provided in a record to offerees in compliance
21with a rule adopted by the administrator under this chapter.
AB816,42,2422
(c) A stop order of which the offeror is aware has not been issued by the
23administrator under this chapter and an audit, inspection, or proceeding that may
24culminate in a stop order is not known by the offeror to be pending.
AB816,43,4
1(18) A transaction involving the distribution of the securities of an issuer to the
2security holders of another person in connection with a merger, consolidation,
3exchange of securities, sale of assets, or other reorganization to which the issuer, or
4its parent or subsidiary and the other person, or its parent or subsidiary, are parties.
AB816,43,5
5(19) A rescission offer, sale, or purchase under s. 551.511.
AB816,43,9
6(20) An offer or sale of a security to a person not a resident of this state and not
7present in this state if the offer or sale does not constitute a violation of the laws of
8the state or foreign jurisdiction in which the offeree or purchaser is present and is
9not part of an unlawful plan or scheme to evade this chapter.
AB816,43,16
10(21) Employees' stock purchase, savings, option, profit-sharing, pension, or
11similar employees' benefit plan, including any securities, plan interests, and
12guarantees issued under a compensatory benefit plan or compensation contract,
13contained in a record, established by the issuer, its parents, its majority-owned
14subsidiaries, or the majority-owned subsidiaries of the issuer's parent, for the
15participation of their employees including offers or sales of such securities to all of
16the following:
AB816,43,1817
(a) Directors; general partners; trustees, if the issuer is a business trust;
18officers; consultants; and advisors.
AB816,43,2019
(b) Family members who acquire such securities from those persons through
20gifts or domestic relations orders.
AB816,43,2321
(c) Former employees, directors, general partners, trustees, officers,
22consultants, and advisors if those individuals were employed by or providing services
23to the issuer when the securities were offered.
AB816,44,3
1(d) Insurance agents who are exclusive insurance agents of the issuer, or the
2issuer's subsidiaries or parents, or who derive more than 50 percent of their annual
3income from those organizations.
AB816,44,4
4(22) A transaction involving any of the following:
AB816,44,115
(a) A stock dividend or equivalent equity distribution, whether the corporation
6or other business organization distributing the dividend or equivalent equity
7distribution is the issuer or not, if nothing of value is given by stockholders or other
8equity holders for the dividend or equivalent equity distribution other than the
9surrender of a right to a cash or property dividend if each stockholder or other equity
10holder may elect to take the dividend or equivalent equity distribution in cash,
11property, or stock.
AB816,44,1412
(b) An act incident to a judicially approved reorganization in which a security
13is issued in exchange for one or more outstanding securities, claims, or property
14interests, or partly in such exchange and partly for cash.