1997 WISCONSIN ACT 316
An Act to renumber and amend 551.21 (1), 551.31 (1m), 551.31 (2) (a), 551.32 (1) (d), 551.34 (6) and 551.52 (1) (b); to amend 551.02 (2) (intro.), (a) and (b), 551.02 (7) (intro.), 551.02 (7) (a), 551.02 (7) (b), 551.02 (7) (c), 551.02 (7) (d), 551.02 (7) (e), 551.02 (12), subchapter II (title) of chapter 551 [precedes 551.21], 551.22 (7), 551.23 (3) (intro.), 551.23 (3) (a), 551.23 (3) (b), 551.23 (3) (c), 551.23 (8) (b) and (c), 551.23 (16), 551.23 (19) (a), 551.23 (19) (b), 551.23 (19) (d), 551.25 (1), 551.25 (2) (intro.), 551.25 (2) (a), 551.25 (2) (b), 551.25 (2) (c), subchapter III (title) of chapter 551 [precedes 551.31], 551.31 (title), 551.31 (2) (d), 551.32 (title), 551.32 (1) (a), 551.32 (1) (b), 551.32 (3), 551.32 (4), 551.33 (1), 551.33 (2), 551.33 (3), 551.33 (4), 551.34 (1) (b), 551.34 (1) (f), 551.34 (5), 551.44, 551.52 (1) (a), 551.52 (2), 551.53 (1) (b), 551.55, 551.63 (1), (2) and (3), 551.64 (2) and (3) and 551.65 (1); to repeal and recreate 551.31 (1), 551.31 (3), 551.31 (4) and 551.32 (5) and (6); and to create 220.32, 551.02 (4g), 551.02 (4r), 551.02 (7) (ed) and (eh), 551.02 (7) (em), 551.02 (7m), 551.21 (1) (c), 551.29, 551.31 (3m), 551.31 (4m), 551.32 (1m), 551.32 (8), 551.32 (9) (b), 551.33 (8) and 551.52 (1) (b) 2. of the statutes; relating to: the regulation of investment advisers and investment adviser representatives, the registration of securities, transfers of trust business within bank holding company systems and granting rule-making authority.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
316,1e
Section 1e. 220.32 of the statutes is created to read:
220.32 Transfer of trust business within bank holding company groups. (1) Definitions. In this section:
(a) “Corporate fiduciary" means all of the following:
1. A trust company bank, state bank with trust powers, corporation or limited liability company, that is authorized under the laws of this state to accept and execute trusts.
2. A national bank or other federally chartered financial institution, if that bank or institution has its principal place of business in this state and is authorized by the appropriate federal agency to accept and execute trusts.
(b) “Subsidiary" of a bank holding company means any other corporation or limited liability company of which voting stock having a majority of the votes entitled to be cast is owned, directly or indirectly, by the bank holding company.
(c) “Trust business" includes self-declared trusts that are established and maintained by a corporate fiduciary, such as common trust funds and group trust funds, and all other activities in which a corporate fiduciary is acting as a fiduciary, as defined in s. 112.01 (1) (b), regardless of whether or not a portion of these activities could be undertaken by an entity that is not authorized to accept and execute trusts in this state.
(2) Transfer to successor fiduciary. If the board of directors of a bank holding company adopt a resolution directing one of its subsidiaries that is a corporate fiduciary to succeed to all or part of the existing or future trust business of another of its subsidiaries that is a corporate fiduciary, the successor corporate fiduciary shall succeed to the predecessor corporate fiduciary. The substitution shall be effective on the date specified in the resolution and no additional authorization is needed. The successor corporate fiduciary shall succeed to all capacities in which the predecessor corporate fiduciary had been acting with respect to the transferred trust business. If, or to the extent that, the resolution directs that one subsidiary shall succeed to future trust business of another subsidiary of the same bank holding company, the successor shall be considered to be named as fiduciary in all writings that named the predecessor corporate fiduciary as trustee, including all wills, trusts, court orders and similar documents and instruments.
316,1m
Section 1m. 551.02 (2) (intro.), (a) and (b) of the statutes are amended to read:
551.02 (2) (intro.) “Agent" means any individual other than a broker-dealer who represents a broker-dealer or issuer in effecting or attempting to effect transactions in securities. A partner, officer or director of a broker-dealer or issuer, or a person occupying a similar status or performing similar functions, is an agent if he or she is within this definition. “Agent" does not include an individual who represents an issuer in doing any of the following:
(a) Effecting transactions in a security exempted by s. 551.22;.
(b) Effecting transactions exempted by s. 551.23, other than transactions exempted under s. 551.23 (8) (g), (10) or (19) in which the individual receives a commission or other remuneration directly or indirectly for soliciting or selling to any person in this state; or.
316,2
Section 2
. 551.02 (4g) of the statutes is created to read:
551.02 (4g) “Federal covered adviser" means a person who is registered under section 203 of the Investment Advisers Act of 1940.
316,3
Section 3
. 551.02 (4r) of the statutes is created to read:
551.02 (4r) “Federal covered security" means any security that is a covered security under section 18 (b) of the Securities Act of 1933 or regulations promulgated under that act.
316,4
Section 4
. 551.02 (7) (intro.) of the statutes is amended to read:
551.02 (7) (intro.) “Investment adviser" means any person who, for compensation, engages in the business of advising others, either directly or through publications, writings or electronic means, as to the value of securities or as to the advisability of investing in, purchasing or selling securities, or who, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities. “Investment adviser" does not include any of the following:
316,5
Section 5
. 551.02 (7) (a) of the statutes is amended to read:
551.02 (7) (a) A bank, savings institution or trust company;.
316,6
Section 6
. 551.02 (7) (b) of the statutes is amended to read:
551.02 (7) (b) A lawyer, accountant, engineer or teacher whose performance of these services is solely incidental to the practice of his or her profession;
.
316,7
Section 7
. 551.02 (7) (c) of the statutes is amended to read:
551.02 (7) (c) A broker-dealer or agent whose performance of these services is solely incidental to the conduct of his or her business as a broker-dealer or agent and who receives no special compensation for them;.
316,8
Section 8
. 551.02 (7) (d) of the statutes is amended to read:
551.02 (7) (d) A publisher of any bona fide newspaper, news magazine or business or financial publication with a regular and paid circulation or a publisher of any securities advisory newsletter with a regular and paid circulation which does not provide advice to subscribers on their specific investment situation;.
316,9
Section 9
. 551.02 (7) (e) of the statutes is amended to read:
551.02 (7) (e) The investment board; or.
316,10
Section 10
. 551.02 (7) (ed) and (eh) of the statutes are created to read:
551.02 (7) (ed) A federal covered adviser, unless the federal covered adviser is required to become licensed or qualify for an exclusion or exemption from licensure under s. 551.32 (1m) (c).
(eh) A person who is excluded from the definition of “investment adviser" under section 202 (a) (11) of the Investment Advisers Act of 1940.
316,11
Section 11
. 551.02 (7) (em) of the statutes is created to read:
551.02 (7) (em) An investment adviser representative.
316,12
Section 12
. 551.02 (7m) of the statutes is created to read:
551.02 (7m) (a) “Investment adviser representative" means any of the following, unless excluded under par. (b):
1. A supervised person, as defined by the division by rule, of an investment adviser or a federal covered adviser, unless one of the following applies:
a. Not more than a percentage, specified by the division by rule, of the clients of the supervised person are natural persons who are not excepted persons, as defined by the division by rule.
b. The supervised person does not, on a regular basis, solicit, meet with or otherwise communicate with clients of the investment adviser or federal covered adviser.
c. The supervised person provides only impersonal investment advice, as defined by the division by rule.
2. A 3rd-party solicitor, as defined by the division by rule.
(b) “Investment adviser representative" does not include any person excluded by the division by rule or order.
316,13
Section 13
. 551.02 (12) of the statutes is amended to read:
551.02 (12) “Securities act
Act of 1933", “securities exchange act Securities Exchange Act of 1934", “
investment company act Investment Company Act of 1940", “investment advisers act Investment Advisers Act of 1940" and “internal revenue code Internal Revenue Code" mean the federal statutes of those names as amended on January 1, 1970 1998, including such later amendments as the division determines are not inconsistent with the purpose of this chapter.
316,14
Section 14
. Subchapter II (title) of chapter 551 [precedes 551.21] of the statutes is amended to read:
CHAPTER 551
SUBCHAPTER II
REGISTRATION OF and
notice filing procedures;
SECURITIES
316,15
Section 15
. 551.21 (1) of the statutes is renumbered 551.21 (1) (intro.) and amended to read:
551.21 (1) (intro.) It is unlawful for any person to offer or sell any security in this state unless it
at least one of the following conditions is met:
(a) The security is registered under this chapter
or the.
(b) The security or transaction is exempted under s. 551.22 or 551.23.
316,16
Section 16
. 551.21 (1) (c) of the statutes is created to read:
551.21 (1) (c) The security is a federal covered security.
316,17
Section 17
. 551.22 (7) of the statutes is amended to read:
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.
316,18
Section 18
. 551.23 (3) (intro.) of the statutes is amended to read:
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:
316,19
Section 19
. 551.23 (3) (a) of the statutes is amended to read:
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.
316,20
Section 20
. 551.23 (3) (b) of the statutes is amended to read:
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.
316,21
Section 21
. 551.23 (3) (c) of the statutes is amended to read:
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.
316,22
Section 22
. 551.23 (8) (b) and (c) of the statutes are amended to read:
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.
(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.
316,23
Section 23
. 551.23 (16) of the statutes is amended to read:
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.
