AB816,51,8
23(5) Effectiveness of registration statement. If the federal registration
24statement becomes effective before each of the conditions in this section is satisfied
25or is waived by the administrator, the registration statement is automatically
1effective under this chapter when all the conditions are satisfied or waived. If the
2registrant notifies the administrator of the date when the federal registration
3statement is expected to become effective, the administrator shall promptly notify
4the registrant by telecopy, telephone, or electronic means and promptly confirm this
5notice by a record, indicating whether all the conditions are satisfied or waived and
6whether the administrator intends the institution of a proceeding under s. 551.306.
7The notice by the administrator does not preclude the institution of such a
8proceeding.
AB816,51,10
9551.304 Securities registration by qualification. (1) Registration
10permitted. A security may be registered by qualification under this section.
AB816,51,14
11(2) Required records. A registration statement under this section must
12contain the information or records specified in s. 551.305, a consent to service of
13process complying with s. 551.611, and, if required by rule adopted under this
14chapter, any, or any combination of, the following information or records:
AB816,51,1915
(a) With respect to the issuer and any significant subsidiary, its name, address,
16and form of organization; the state or foreign jurisdiction and date of its organization;
17the general character and location of its business; a description of its physical
18properties and equipment; and a statement of the general competitive conditions in
19the industry or business in which it is or will be engaged.
AB816,52,220
(b) With respect to each director and officer of the issuer, and other person
21having a similar status or performing similar functions, the person's name, address,
22and principal occupation for the previous 5 years; the amount of securities of the
23issuer held by the person as of the 30th day before the filing of the registration
24statement; the amount of the securities covered by the registration statement to
25which the person has indicated an intention to subscribe; and a description of any
1material interest of the person in any material transaction with the issuer or a
2significant subsidiary effected within the previous 3 years or proposed to be effected.
AB816,52,63
(c) With respect to persons covered by par. (b), the aggregate sum of the
4remuneration paid to those persons during the previous 12 months and estimated
5to be paid during the next 12 months, directly or indirectly, by the issuer, and all
6predecessors, parents, subsidiaries, and affiliates of the issue.
AB816,52,97
(d) With respect to a person owning of record or owning beneficially, if known,
810 percent or more of the outstanding shares of any class of equity security of the
9issuer, the information specified in par. (b) other than the person's occupation.
AB816,52,1310
(e) With respect to a promoter, if the issuer was organized within the previous
113 years, the information or records specified in par. (b), any amount paid to the
12promoter within that period or intended to be paid to the promoter, and the
13consideration for the payment.
AB816,52,2014
(f) With respect to a person on whose behalf any part of the offering is to be made
15in a nonissuer distribution, the person's name and address; the amount of securities
16of the issuer held by the person as of the date of the filing of the registration
17statement; a description of any material interest of the person in any material
18transaction with the issuer or any significant subsidiary effected within the previous
193 years or proposed to be effected; and a statement of the reasons for making the
20offering.
AB816,53,221
(g) The capitalization and long term debt, on both a current and pro forma
22basis, of the issuer and any significant subsidiary, including a description of each
23security outstanding or being registered or otherwise offered, and a statement of the
24amount and kind of consideration, whether in the form of cash, physical assets,
25services, patents, goodwill, or anything else of value, for which the issuer or any
1subsidiary has issued its securities within the previous 2 years or is obligated to issue
2its securities.
AB816,53,173
(h) The kind and amount of securities to be offered; the proposed offering price
4or the method by which it is to be computed; any variation at which a proportion of
5the offering is to be made to a person or class of persons other than the underwriters,
6with a specification of the person or class; the basis on which the offering is to be made
7if otherwise than for cash; the estimated aggregate underwriting and selling
8discounts or commissions and finders' fees, including separately cash, securities,
9contracts, or anything else of value to accrue to the underwriters or finders in
10connection with the offering or, if the selling discounts or commissions are variable,
11the basis of determining them and their maximum and minimum amounts; the
12estimated amounts of other selling expenses, including legal, engineering, and
13accounting charges; the name and address of each underwriter and each recipient
14of a finder's fee; a copy of any underwriting or selling group agreement under which
15the distribution is to be made or the proposed form of any such agreement whose
16terms have not yet been determined; and a description of the plan of distribution of
17any securities that are to be offered otherwise than through an underwriter.
AB816,54,318
(i) The estimated monetary proceeds to be received by the issuer from the
19offering; the purposes for which the proceeds are to be used by the issuer; the
20estimated amount to be used for each purpose; the order or priority in which the
21proceeds will be used for the purposes stated; the amounts of any funds to be raised
22from other sources to achieve the purposes stated; the sources of the funds; and, if
23a part of the proceeds is to be used to acquire property, including goodwill, otherwise
24than in the ordinary course of business, the names and addresses of the vendors, the
25purchase price, the names of any persons that have received commissions in
1connection with the acquisition, and the amounts of the commissions and other
2expenses in connection with the acquisition, including the cost of borrowing money
3to finance the acquisition.
AB816,54,84
(j) A description of any stock options or other security options outstanding, or
5to be created in connection with the offering, and the amount of those options held
6or to be held by each person required to be named in par. (b), (d), (e), (f), or (h) and
7by any person that holds or will hold 10 percent or more in the aggregate of those
8options.
AB816,54,139
(k) The dates of, parties to, and general effect concisely stated of each
10managerial or other material contract made or to be made otherwise than in the
11ordinary course of business to be performed in whole or in part at or after the filing
12of the registration statement or that was made within the previous 2 years, and a
13copy of the contract.
AB816,54,1614
(L) A description of any pending litigation, action, or proceeding to which the
15issuer is a party and that materially affects its business or assets, and any litigation,
16action, or proceeding known to be contemplated by governmental authorities.
AB816,54,2017
(m) A copy of any prospectus, pamphlet, circular, form letter, advertisement,
18or other sales literature intended as of the effective date to be used in connection with
19the offering and any solicitation of interest used in compliance with s. 551.202 (17)
20(b).
AB816,54,2421
(n) A specimen or copy of the security being registered, unless the security is
22uncertificated; a copy of the issuer's articles of incorporation and bylaws or their
23substantial equivalents, in effect; and a copy of any indenture or other instrument
24covering the security to be registered.
AB816,55,5
1(o) A signed or conformed copy of an opinion of counsel concerning the legality
2of the security being registered, with an English translation if it is in a language
3other than English, which states whether the security when sold will be validly
4issued, fully paid, and nonassessable and, if a debt security, a binding obligation of
5the issuer.
AB816,55,106
(p) A signed or conformed copy of a consent of any accountant, engineer,
7appraiser, or other person whose profession gives authority for a statement made by
8the person, if the person is named as having prepared or certified a report or
9valuation, other than an official record, that is public, which is used in connection
10with the registration statement.
AB816,55,1811
(q) A balance sheet of the issuer as of a date within 4 months before the filing
12of the registration statement; a statement of income and a statement of cash flows
13for each of the 3 fiscal years preceding the date of the balance sheet and for any period
14between the close of the immediately previous fiscal year and the date of the balance
15sheet, or for the period of the issuer's and any predecessor's existence if less than 3
16years; and, if any part of the proceeds of the offering is to be applied to the purchase
17of a business, the financial statements that would be required if that business were
18the registrant.
AB816,55,2219
(r) Any additional information or records required by rule adopted or order
20issued under this chapter, including, without limitation, a report by accountants,
21engineers, appraisers, or another professional person as deemed necessary by the
22administrator.
AB816,56,2
23(3) Conditions for effectiveness of registration statement. A registration
24statement under this section becomes effective 30 days, or any shorter period
25provided by rule adopted or order issued under this chapter, after the date the
1registration statement or the last amendment other than a price amendment is filed,
2if all of the following apply:
AB816,56,33
(a) A stop order is not in effect and a proceeding is not pending under s. 551.306.
AB816,56,44
(b) The administrator has not issued an order under s. 551.306
AB816,56,55
(c) The applicant or registrant has not requested that effectiveness be delayed.
AB816,56,13
6(4) Delay of effectiveness of registration statement. The administrator may
7delay effectiveness once for not more than 90 days if the administrator determines
8and notifies via comment letter or other letter that the registration statement is not
9complete in all material respects and promptly notifies the applicant or registrant
10of that determination, which may be by means of a comment letter or correspondence
11and not an order. The administrator may also further delay effectiveness for a
12further period of not more than 30 days if the administrator determines that the
13delay is necessary or appropriate.
AB816,56,18
14(5) Prospectus distribution may be required. A rule adopted or order issued
15under this chapter may require as a condition of registration under this section that
16a prospectus containing a specified part of the information or record specified in sub.
17(2) be sent or given to each person to which an offer is made, before or concurrently,
18with the earliest of the following:
AB816,56,2319
(a) The first offer made in a record to the person otherwise than by means of
20a public advertisement, by or for the account of the issuer or another person on whose
21behalf the offering is being made or by an underwriter or broker-dealer that is
22offering part of an unsold allotment or subscription taken by the person as a
23participant in the distribution.
AB816,56,2424
(b) The confirmation of a sale made by or for the account of the person.
AB816,56,2525
(c) Payment pursuant to such a sale.
AB816,57,1
1(d) Delivery of the security pursuant to such a sale.
AB816,57,4
2551.305 Securities registration filings. (1) Who may file. A registration
3statement may be filed by the issuer, a person on whose behalf the offering is to be
4made, or a broker-dealer registered under this chapter.
AB816,57,9
5(2) Filing fee. A person filing a registration statement shall pay a filing fee
6as provided in s. 551.614 or as may be supplemented by rule of the administrator.
7If a registration statement is withdrawn before the effective date or a preeffective
8stop order is issued under s. 551.306, the administrator shall retain the fee as
9provided in s. 551.614 or as may be supplemented by rule of the administrator.
AB816,57,11
10(3) Status of offering. A registration statement filed under s. 551.303 or
11551.304 must specify all of the following:
AB816,57,1212
(a) The amount of securities to be offered in this state.
AB816,57,1413
(b) The states in which a registration statement or similar record in connection
14with the offering has been or is to be filed.
AB816,57,1715
(c) Any adverse order, judgment, or decree issued in connection with the
16offering by a state securities regulator, the Securities and Exchange Commission, or
17a court.
AB816,57,21
18(4) Incorporation by reference. A record filed under this chapter or the
19predecessor act within 5 years preceding the filing of a registration statement may
20be incorporated by reference in the registration statement to the extent that the
21record is currently accurate.
AB816,58,2
22(5) Nonissuer distribution. In the case of a nonissuer distribution,
23information or a record may not be required under sub. (9) or s. 551.304, unless it is
24known to the person filing the registration statement or to the person on whose
1behalf the distribution is to be made or unless it can be furnished by those persons
2without unreasonable effort or expense.
AB816,58,7
3(7) Form of subscription. A rule adopted or order issued under this chapter
4may require as a condition of registration that a security registered under this
5chapter be sold only on a specified form of subscription or sale contract and that a
6signed or conformed copy of each contract be filed under this chapter or preserved
7for a period specified by the rule or order, which may not be longer than 5 years.
AB816,58,20
8(8) Effective period. Except while a stop order is in effect under s. 551.306,
9a registration statement is effective for one year after its effective date, or for any
10longer period designated in an order under this chapter during which the security
11is being offered or distributed in a nonexempted transaction by or for the account of
12the issuer or other person on whose behalf the offering is being made or by an
13underwriter or broker-dealer that is still offering part of an unsold allotment or
14subscription taken as a participant in the distribution. For the purposes of a
15nonissuer transaction, all outstanding securities of the same class identified in the
16registration statement as a security registered under this chapter are considered to
17be registered while the registration statement is effective. If any securities of the
18same class are outstanding, a registration statement may not be withdrawn until one
19year after its effective date. A registration statement may be withdrawn only with
20the approval of the administrator.
AB816,58,25
21(9) Periodic reports. While a registration statement is effective, a rule
22adopted or order issued under this chapter may require the person that filed the
23registration statement to file reports, not more often than quarterly, to keep the
24information or other record in the registration statement reasonably current and to
25disclose the progress of the offering.
AB816,59,8
1(10) Posteffective amendments. A registration statement may be amended
2after its effective date. The posteffective amendment becomes effective when the
3administrator so orders. If a posteffective amendment is made to increase the
4number of securities specified to be offered or sold, the person filing the amendment
5shall pay a registration fee as provided in s. 551.614 or as may be supplemented by
6rule of the administrator. A posteffective amendment relates back to the date of the
7offering of the additional securities being registered if, within one year after the date
8of the sale, the amendment is filed and the additional registration fee is paid.
AB816,59,11
9(11) Indentures. The administrator may by rule require that securities be
10issued under a trust indenture, unless this requirement is waived by the
11administrator.
AB816,59,16
12551.306 Denial, suspension, and revocation of securities registration.
13(1) Stop orders. The administrator may issue a stop order denying effectiveness to,
14or suspending or revoking the effectiveness of, a registration statement if the
15administrator finds that the order is in the public interest and that any of the
16following apply:
AB816,59,2117
(a) The registration statement as of its effective date or before the effective date
18in the case of an order denying effectiveness, an amendment under s. 551.305 (10)
19as of its effective date, or a report under s. 551.305 (9), is incomplete in a material
20respect or contains a statement that, in the light of the circumstances under which
21it was made, was false or misleading with respect to a material fact.
AB816,60,422
(b) This chapter or a rule adopted or order issued under this chapter or a
23condition imposed under this chapter has been willfully violated, in connection with
24the offering, by the person filing the registration statement; by the issuer, a partner,
25officer, or director of the issuer or a person having a similar status or performing a
1similar function; a promoter of the issuer; or a person directly or indirectly
2controlling or controlled by the issuer; but only if the person filing the registration
3statement is directly or indirectly controlled by or acting for the issuer; or by an
4underwriter.
AB816,60,145
(c) The security registered or sought to be registered is the subject of a
6permanent or temporary injunction of a court of competent jurisdiction or an
7administrative stop order or similar order issued under any federal, foreign, or state
8law other than this chapter applicable to the offering, but the administrator may not
9institute a proceeding against an effective registration statement under this
10paragraph more than one year after the date of the order or injunction on which it
11is based, and the administrator may not issue an order under this paragraph on the
12basis of an order or injunction issued under the securities act of another state unless
13the order or injunction was based on conduct that would constitute, as of the date of
14the order, a ground for a stop order under this section.
AB816,60,1615
(d) The issuer's enterprise or method of business includes or would include
16activities that are unlawful where performed.
AB816,60,1817
(e) With respect to a security sought to be registered under s. 551.303, there has
18been a failure to comply with the undertaking required by s. 551.303 (2) (d).
AB816,60,2019
(f) The applicant or registrant has not paid the filing fee, but the administrator
20shall void the order if the deficiency is corrected.
AB816,60,2221
(g) The offering will work or tend to work a fraud upon purchasers or would so
22operate.
AB816,61,2
23(3) Institution of stop order. The administrator may not institute a stop order
24proceeding against an effective registration statement on the basis of conduct or a
25transaction known to the administrator when the registration statement became
1effective unless the proceeding is instituted within 30 days after the registration
2statement became effective.
AB816,61,13
3(4) Summary process. The administrator may summarily revoke, deny,
4postpone, or suspend the effectiveness of a registration statement pending final
5determination of an administrative proceeding. Upon the issuance of the order, the
6administrator shall promptly notify each person specified in sub. (5) that the order
7has been issued, the reasons for the revocation, denial, postponement, or suspension,
8and that within 10 days after the receipt of a request in a record from the person the
9matter will be scheduled for a hearing. If a hearing is not requested and none is
10ordered by the administrator, within 30 days after the date of service of the order, the
11order becomes final. If a hearing is requested or ordered, the administrator, after
12notice of and opportunity for hearing for each person subject to the order, may modify
13or vacate the order or extend the order until final determination.
AB816,61,15
14(5) Procedural requirements for stop order. A stop order may not be issued
15under this chapter without all of the following:
AB816,61,1716
(a) Appropriate notice to the applicant or registrant, the issuer, and the person
17on whose behalf the securities are to be or have been offered.
AB816,61,1818
(b) An opportunity for hearing.
AB816,61,1919
(c) Findings of fact and conclusions of law in a record in accordance with ch. 227.
AB816,61,23
20(6) Modification or vacation of stop order. The administrator may modify
21or vacate a stop order issued under this section if the administrator finds that the
22conditions that caused its issuance have changed or that it is necessary or
23appropriate in the public interest or for the protection of investors.
AB816,62,2
24551.307 Waiver and modification. The administrator may waive or modify,
25in whole or in part, any or all of the requirements of ss. 551.302, 551.303, and 551.304
1(2) or the requirement of any information or record in a registration statement or in
2a periodic report filed pursuant to s. 551.305 (9).
AB816,62,73
subchapter iV
4
BROKER-DEALERS, AGENTS,
5
INVESTMENT ADVISERS, INVESTMENT
6
ADVISER REPRESENTATIVES, AND
7
FEDERAL COVERED INVESTMENT ADVISERS
AB816,62,11
8551.401 Broker-dealer registration requirement and exemptions. (1) 9Registration requirement. It is unlawful for a person to transact business in this
10state as a broker-dealer unless the person is registered under this chapter as a
11broker-dealer or is exempt from registration as a broker-dealer under sub. (2) or (4).
AB816,62,14
12(2) Exemptions from registration. A broker-dealer is exempt from the
13registration requirement of sub. (1) if its only transactions effected in this state are
14with the following:
AB816,62,1515
(a) The issuer of the securities involved in the transactions.
AB816,62,1716
(b) A broker-dealer registered as a broker-dealer under this chapter or not
17required to be registered as a broker-dealer under this chapter.
AB816,62,1818
(c) Institutional investors.
AB816,62,2019
(cm) Accredited investors as defined in Rule 501 (a) (1), (2), (3), (7) or (8) adopted
20under the Securities Act of 1933.
AB816,62,2321
(d) A nonaffiliated federal covered investment adviser with investments under
22management in excess of $100,000,000 acting for the account of others pursuant to
23discretionary authority in a signed record.
AB816,63,324
(e) A bona fide preexisting customer whose principal place of residence is not
25in this state and the person is registered as a broker-dealer under the Securities
1Exchange Act of 1934 or not required to be registered under the Securities Exchange
2Act of 1934 and is registered under the securities act of the state in which the
3customer maintains a principal place of residence.
AB816,63,64
(f) A bona fide preexisting customer whose principal place of residence is in this
5state but was not present in this state when the customer relationship was
6established, if all of the following apply:
AB816,63,117
1. The broker-dealer is registered under the Securities Exchange Act of 1934
8or not required to be registered under the Securities Exchange Act of 1934 and is
9registered under the securities laws of the state in which the customer relationship
10was established and where the customer had maintained a principal place of
11residence.
AB816,63,2012
2. Within 45 days after the customer's first transaction in this state, the person
13files an application for registration as a broker-dealer in this state and a further
14transaction is not effected more than 75 days after the date on which the application
15is filed, or, if earlier, the date on which the administrator notifies the person that the
16administrator has granted registration or denied the application for registration or
17has stayed the pendency of the application for good cause; provided the person may
18effect unsolicited orders to liquidate open positions in existing customer accounts if
19no commission or other remuneration is paid or given directly or indirectly for
20effecting such transactions.
AB816,63,2221
(h) Any other person exempted by rule adopted or order issued under this
22chapter.
AB816,64,11
23(3) Limits on employment or association. It is unlawful for a broker-dealer,
24or for an issuer engaged in offering, offering to purchase, purchasing, or selling
25securities in this state, directly or indirectly, to employ or associate with an
1individual to engage in an activity related to securities transactions in this state if
2the registration of the individual is denied or suspended or revoked or the individual
3is barred from employment or association with a broker-dealer, an issuer, an
4investment adviser, or a federal covered investment adviser by an order of the
5administrator under this chapter, the Securities and Exchange Commission, or a
6self-regulatory organization. A broker-dealer or issuer does not violate this
7subsection if the broker-dealer or issuer did not know, and in the exercise of
8reasonable care could not have known, of the denial, suspension, revocation, or bar.
9Upon request from a broker-dealer or issuer and for good cause, an order under this
10chapter may modify or waive, in whole or in part, the application of the prohibitions
11of this subsection to the broker-dealer.
AB816,64,13
12(4) Foreign transactions. A rule adopted or order issued under this chapter
13may permit any of the following:
AB816,64,1714
(a) A broker-dealer that is registered in Canada or other foreign jurisdiction
15and that does not have a place of business in this state to effect transactions in
16securities with or for, or attempt to effect the purchase or sale of any securities by,
17any of the following:
AB816,64,2018
1. An individual from Canada or other foreign jurisdiction who is temporarily
19present in this state and with whom the broker-dealer had a bona fide customer
20relationship before the individual entered the United States.
AB816,64,2321
2. An individual from Canada or other foreign jurisdiction who is present in this
22state and whose transactions are in a self-directed tax advantaged retirement plan
23of which the individual is the holder or contributor in that foreign jurisdiction.
AB816,65,3
13. An individual who is present in this state, with whom the broker-dealer
2customer relationship arose while the individual was temporarily or permanently
3resident in Canada or the other foreign jurisdiction.
AB816,65,64
(b) An agent who represents a broker-dealer that is exempt under this
5subsection to effect transactions in securities or attempt to effect the purchase or sale
6of securities in this state as permitted for a broker-dealer described in par. (a).
AB816,65,10
7551.402 Agent registration requirement and exemptions. (1) 8Registration requirement. It is unlawful for an individual to transact business in
9this state as an agent unless the individual is registered under this chapter as an
10agent or is exempt from registration as an agent under sub. (2).
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11(2) Exemptions from registration. The following individuals are exempt from
12the registration requirement of sub. (1):
AB816,65,1513
(a) An individual who represents a broker-dealer in effecting transactions in
14this state limited to those described in section 15 (h) (2) of the Securities Exchange
15Act of 1934 (
15 USC 78o (h) (2)).
AB816,65,1716
(b) An individual who represents a broker-dealer that is exempt under s.
17551.401 (2) or (4).
AB816,65,2218
(c) An individual who represents an issuer with respect to an offer or sale of the
19issuer's own securities or those of the issuer's parent or any of the issuer's
20subsidiaries, and who is not compensated in connection with the individual's
21participation by the payment of commissions or other remuneration based, directly
22or indirectly, on transactions in those securities.
AB816,65,2423
(d) An individual who represents an issuer and who effects transactions in the
24issuer's securities exempted by s. 551.202, other than s. 551.202 (11), (14) or (24).
AB816,66,7
1(e) An individual who represents an issuer that effects transactions solely in
2federal covered securities of the issuer, but an individual who effects transactions in
3a federal covered security under section 18 (b) (3) or 18 (b) (4) (D) of the Securities
4Act of 1933 (
15 USC 77r (b) (3) or
77r (b) (4) (D)) is not exempt if the individual is
5compensated in connection with the agent's participation by the payment of
6commissions or other remuneration based, directly or indirectly, on transactions in
7those securities.
AB816,66,128
(f) An individual who represents a broker-dealer registered in this state under
9s. 551.401 (1) or exempt from registration under s. 551.401 (2) in the offer and sale
10of securities for an account of a nonaffiliated federal covered investment adviser with
11investments under management in excess of $100,000,000 acting for the account of
12others pursuant to discretionary authority in a signed record.
AB816,66,1413
(g) An individual who represents an issuer in connection with the purchase of
14the issuer's own securities.