2) Renumbering certain of the rules under the so-called “institutional investor" exemption in s. 551.23 (8), Stats., to clarify that the rules in s. DFI-Sec 2.02 (8) (a) to (f) relate solely to the statute exemptions in s. 552.23 (8) (a) to (f), Stats., and that the specific “individual accredited investor" exemption rule s. DFI-Sec 2.02 (4) (g) relates solely to its corresponding statute registration exemption in s. 551.23 (8) (g), Stats.
3) Adding to the combined 10 offeree/existing securityholder registration exemption in s. DFI-Sec 2.02 (9) (c) equivalent language to that contained in the component exemption in s. 551.23 (11), Stats., to provide that offers to institutional investors listed in s. 551.23 (8), Stats., are not counted for purposes of the rule;
4) Adding to the advertising filing exclusion in s. DFI-Sec 7.02 (1) (b) materials used in connection with use of the registration exemption in s. DFI-Sec 2.02 (9) (m) for an employee benefit plan that qualifies for (automatic) use of the federal securities exemption under Rule 701 of the Securities Act of 1933;
5) Amending the broker-dealer and investment adviser record-keeping rules in ss. DFI-Sec 4.03 and 5.03 (which relate to retention by licensees of a separate file of customer complaints), to also require retention of investigative inquiries directed to the licensee by any securities regulatory authority or any law enforcement authority regarding the licensee 's securities business;
Moving the existing investment adviser record-keeping rule in s. DFI-Sec 5.03 (1) (o) [requiring creation and retention of records relating to customers' financial condition and investment objectives] to be under sub. (3) to thereby make the requirement applicable only for those advisers who provide regular and ongoing supervision and management of customer accounts, and/or have discretionary authority;
7) Creating both a new investment adviser record-keeping rule, as well as a rule of conduct provision, relating to a licensee's compliance with the federal “brochure rule " [which is incorporated by reference in s. DFI-Sec 5.05 (8)] to do the following:
(i) Provide that advisers need to maintain a record of the initial, as well as the required annual, provision of the brochure to customers; and to
(ii) Specify the time frames within which the brochure must be provided to customers.
Each section that adopts, amends or repeals a rule is followed by a separate analysis which discusses the nature of the revision as well as the reason for it.
Copies of Rule
A copy of the entirety of the proposed rule revisions to be considered may be obtained upon request to the Division of Securities, Department of Financial Institutions, 345 West Washington Avenue, 4th Floor, P.O. Box 1768, Madison, WI 53701.
A summary of the fiscal effects of the proposed rule revisions is as follows:
(i) No one-time revenue fluctuations;
(ii) No annual fiscal effects;
(iii) No long-range fiscal implications;
(iv) No fiscal effect on local units of government.
Initial Regulatory Flexibility Analysis
Types of small businesses that could be affected by certain of the rule revisions are:
(i) Any small business looking to raise capital in a securities offering pursuant to Regulation A under the federal Securities Act of 1933 will be able to use the amended prospectus/disclosure document rule in s. DFI-Sec 3.03 (3) allowing use of the revised Form U-7 disclosure document.
(ii) Broker-dealer and investment adviser licensees under the Wisconsin Uniform Securities Law with fewer than 25 full-time employees who meet the other criteria of s. 227.114 (1) (a), Stats.
The proposed revisions to the securities broker-dealer and investment adviser recordkeeping and rule of conduct provisions are applicable equally to all broker-dealers and investment advisers because the requirements involved are for the protection and benefit of Wisconsin customers of those firms. All Wisconsin customers of securities broker-dealers and investment advisers are entitled to the public investor protection benefits of the licensing recordkeeping and rule of conduct requirements, irrespective of the size of the firm providing the securities services. Under the rule revision procedure of the Division of Securities, a copy of the proposed rule revisions is mailed to each broker-dealer licensed in Wisconsin, as well as to each investment adviser licensed or notice-filed in Wisconsin, notifying them of the proposed revisions and soliciting written comments or attendance at the public hearing regarding the proposed rules.
2. Reporting, bookkeeping and other procedures required for compliance with the rules:
(i) Securities broker-dealer and investment adviser licensee recordkeeping rule provisions are added to require retention by such licensees of investigative inquiries directed to the licensee by any securities regulatory authority regarding the licensee's securities business.
(ii) A new investment adviser recordkeeping rule is created relating to a licensee 's compliance with the federal “brochure rule" to provide that advisers need to maintain a record of the initial, as well as the required annual, provision of the brochure to customers.
A copy of the full text of the proposed rule revisions and fiscal estimate may be obtained from:
Randall E. Schumann
Telephone (608) 266-3414
Legal Counsel for the Division of Securities
Dept. of Financial Institutions
345 West Washington Ave., 4th Floor
P. O. Box 1768
Madison, WI 53701
Notice of Submission of Proposed Rules to the Presiding Officer of each House of the Legislature, Under S. 227.19, Stats.
Please check the Bulletin of Proceedings for further information on a particular rule.
Agriculture, Trade and Consumer Protection (CR 00-58):
Ch. ATCP 35 - Relating to the agricultural chemical cleanup program.
S. ETF 20.25 (1) - Relating to distribution to annuitants of the total amount distributed from the transaction amortization account to the annuity reserve under the nonstatutory provisions of 1999 Wis. Act 11.
Ch. NR 809 - Relating to safe drinking water.
Ch. NR 195 - Relating to establishing river protection grants.
Ch. NR 46 - Relating to the administration of the forest crop law and the managed forest law.
S. N 5.08 (2) - Relating to renewal after 5 years.
S. Phar 7.09 - Relating to the automated dispensing of prescription drugs.
SS. WGC 61.02, 61.04, 61.08 and 61.085 - Relating to the implementation and maintenance of the retailer performance program of the Wisconsin Lottery.
Administrative Rules Filed With The
Revisor Of Statutes Bureau
The following administrative rules have been filed with the Revisor of Statutes Bureau and are in the process of being published. The date assigned to each rule is the projected effective date. It is possible that the publication of these rules could be delayed. Contact the Revisor of Statutes Bureau at (608) 266-7275 for updated information on the effective dates for the listed rules.
An order amending s. AB 2.09 (5), relating to the distribution of arts challenge initiative incentive grant funds.
An order creating s. DE 3.04, relating to the oral systemic premedications and subgingival sustained release chemotherapeutic agents that may be administered by a licensed dental hygienist.
An order creating s. Eth 1.03, relating to reporting the topic of a lobbying communication.
An order repealing and recreating ch. HFS 12, relating to uniform procedures for caregiver background checks.
An order affecting ss. Ins 17.01 (3) and 17.28 (6) and (6a), relating to annual patients compensation fund and mediation fund fees for the fiscal year beginning July 1, 2000.
An order affecting ch. NR 10 and ss. NR 11.02, 11.05, 15.022 and 16.02, relating to hunting, trapping and captive wildlife.
Part effective 11-18-00.
Part effective 05-01-01.
An order affecting ch. NR 20 and ss. NR 22.04, 26.10 and 26.31, relating to sport fishing regulations on inland, outlying and boundary waters and fish refuges on inland waters.
Part effective 03-01-01.
Part effective 04-01-01.
Technical College System Board (CR 00-44):
An order creating ch. TCS 16, relating to grants for students.