AB150: Bill Text

AB150,2173,21 551.28 (2) The commissioner department may not institute a stop order proceeding against an effective registration statement on the basis of a fact or transaction known to the commissioner department when the registration statement became effective unless the proceeding is instituted within 180 days after the effective date.

AB150, s. 6681 Section 6681. 551.28 (3) of the statutes is amended to read:

AB150,2174,2 551.28 (3) In a proceeding for registration by qualification, the applicant or registrant has the burden of satisfying the requirements of sub. (1). In a proceeding for registration by coordination, the commissioner department has the burden of establishing the existence of one of the causes enumerated in sub. (1).

AB150, s. 6682 Section 6682. 551.28 (4) of the statutes is amended to read:

AB150,2174,8 551.28 (4) If the public interest and the protection of investors so require, the commissioner department may, by order, summarily deny, postpone, suspend or revoke the effectiveness of the registration statement. Upon the entry of the order, the commissioner department shall serve upon all named parties a copy of the order and notify the parties of their right to request a hearing.

AB150, s. 6683 Section 6683. 551.28 (6) of the statutes is amended to read:

AB150,2174,12 551.28 (6) The commissioner department may vacate or modify a stop order if the commissioner department finds that the conditions which prompted its entry have changed or that it is otherwise in the public interest to do so.

AB150, s. 6684 Section 6684. 551.28 (7) of the statutes is amended to read:

AB150,2174,21 551.28 (7) Subsection (1) (e) and (f) does not apply to the issuance or sale of securities to any person who meets investor financial suitability standards if all material information in connection with the issuance or sale is disclosed to all purchasers. A purchaser shall affirm in writing that the person purchasing securities meets the investor financial suitability standards. The commissioner department shall promulgate rules that establish investor financial suitability standards relating to minimum net worth and to minimum net worth and minimum annual income.

AB150, s. 6685 Section 6685. 551.31 (2) (b) 2. of the statutes is amended to read:

AB150,2175,2 551.31 (2) (b) 2. More than one broker-dealer or more than one issuer, or both, if an application that complies with par. (c) is filed with the commissioner department and the commissioner department, in writing, permits the representation.

AB150, s. 6686 Section 6686. 551.31 (2) (c) of the statutes is amended to read:

AB150,2175,5 551.31 (2) (c) The commissioner department shall by rule specify the required contents and form of an application filed under par. (b) 2.

AB150, s. 6687 Section 6687. 551.31 (2) (d) of the statutes is amended to read:

AB150,2175,11 551.31 (2) (d) When an agent terminates employment with a broker-dealer or issuer, or terminates those activities which make that individual an agent, or transfers employment between licensed broker-dealers, the agent, the broker-dealer or the issuer shall promptly file a notice in accordance with rules adopted by the commissioner department.

AB150, s. 6688 Section 6688. 551.31 (4) of the statutes is amended to read:

AB150,2175,21 551.31 (4) Every license expires one year from its effective date unless renewed, or unless the license is limited or extended for not more than 6 months by rule or order for the purpose of administering the licensing statutes in this chapter. The commissioner department by rule or order may prepare an initial schedule for license renewals so that subsequent renewals of licenses effective January 1, 1970, may be staggered by calendar months. For this purpose the commissioner department may adjust the license fee proportionately. No license is effective after its expiration, and expiration of a license for which a renewal application has not been filed is deemed an application for withdrawal under s. 551.34 (6).

AB150, s. 6689 Section 6689. 551.31 (5) of the statutes is amended to read:

AB150,2176,2 551.31 (5) A bank, savings institution or trust company not licensed as a broker-dealer may execute orders for the purchase or sale of securities as agent for the purchaser or seller thereof in accordance with rules adopted by the commissioner department.

AB150, s. 6690 Section 6690. 551.31 (7) (b) of the statutes is amended to read:

AB150,2176,8 551.31 (7) (b) An application to amend the agent's license to name each additional limited partnership or investment company as the agent's employer is filed with and approved by the commissioner department before the agent makes any offers or sales in this state on behalf of the additional limited partnership or investment company.

AB150, s. 6691 Section 6691. 551.32 (1) (a) of the statutes is amended to read:

AB150,2176,13 551.32 (1) (a) A broker-dealer, agent or investment adviser may obtain an initial or renewal license by filing with the commissioner department, or an organization which the commissioner department by rule designates, an application together with a consent to service of process under s. 551.65 (1).

AB150, s. 6692 Section 6692. 551.32 (1) (b) of the statutes is amended to read:

AB150,2176,25 551.32 (1) (b) An application under par. (a) shall contain whatever information the commissioner department by rule requires concerning the applicant's form and place of organization, proposed method of doing business and financial condition, the qualifications and experience of the applicant, including, in the case of a broker-dealer or investment adviser, the qualifications and experience of any partner, officer, director or controlling person, any injunction or administrative order or conviction of a misdemeanor involving securities and any conviction of a felony, and any other matters which the commissioner department determines are relevant to the application. The commissioner department may by rule or order require an applicant for an initial license to publish an announcement of the application in one or more specified newspapers published in this state.

AB150, s. 6693 Section 6693. 551.32 (1) (c) (intro.) of the statutes is amended to read:

AB150,2177,6 551.32 (1) (c) (intro.) Licensing under this subchapter is effective 30 days after an application is filed, other than for an application for license as an agent for an issuer of securities exempted under s. 551.23 (10) or (19) in which case licensing is effective 10 business days after the application is filed or such earlier time as the commissioner department permits, except:

AB150, s. 6694 Section 6694. 551.32 (1) (c) 2. of the statutes is amended to read:

AB150,2177,10 551.32 (1) (c) 2. If the commissioner department makes a written request for additional information relevant to the application within 30 days after the application is filed, the licensing is effective 30 days after the information is filed;

AB150, s. 6695 Section 6695. 551.32 (1) (c) 4. of the statutes is amended to read:

AB150,2177,13 551.32 (1) (c) 4. The commissioner department may by rule or order specify an earlier effective date.

AB150, s. 6696 Section 6696. 551.32 (1) (d) of the statutes is amended to read:

AB150,2177,17 551.32 (1) (d) The commissioner department shall cooperate with other securities administrators and regulatory authorities to simplify and coordinate license application and renewal procedures.

AB150, s. 6697 Section 6697. 551.32 (2) of the statutes is amended to read:

AB150,2177,21 551.32 (2) Before action on an application the commissioner department may designate an employe to make an examination of the books, records and affairs of the applicant at the applicant's expense.

AB150, s. 6698 Section 6698. 551.32 (4) of the statutes is amended to read:

AB150,2178,4 551.32 (4) The commissioner department may by rule prescribe standards of qualification with respect to training, experience and knowledge of the securities business and provide for an examination, which may be written or oral or both, to be taken by any class of or all applicants, as well as persons who represent or will represent an investment adviser, and the commissioner department may by order require an examination of a licensed broker-dealer, agent or investment adviser for due cause.

AB150, s. 6699 Section 6699. 551.32 (5) of the statutes is amended to read:

AB150,2178,8 551.32 (5) The commissioner department may by rule require a minimum capital for broker-dealers and investment advisers and establish limitations on aggregate indebtedness of broker-dealers in relation to net capital.

AB150, s. 6700 Section 6700. 551.32 (6) of the statutes is amended to read:

AB150,2178,14 551.32 (6) The commissioner department may by rule require the furnishing of surety bonds by broker-dealers and investment advisers and all bonds so required shall provide for suit thereon by injured customers or clients, but no bond may be required of any licensee whose net capital exceeds the amount prescribed by rule for this purpose.

AB150, s. 6701 Section 6701. 551.32 (7) of the statutes is amended to read:

AB150,2178,19 551.32 (7) The commissioner department may by rule or order impose other conditions or limitations in connection with the issuance of licenses under this chapter as the commissioner department deems appropriate in the public interest or for the protection of investors.

AB150, s. 6702 Section 6702. 551.33 (1) of the statutes is amended to read:

AB150,2179,3 551.33 (1) Every licensed broker-dealer, agent and investment adviser shall make and keep all accounts, correspondence, memoranda, papers, books and other records which the commissioner department by rule prescribes. All records required shall be preserved for 3 years unless the commissioner department by rule prescribes otherwise for particular types of records. All required records shall be kept within this state or shall, at the request of the commissioner department, be made available at any time for examination by the commissioner department either in the principal office of the licensee or by production of exact copies thereof in this state.

AB150, s. 6703 Section 6703. 551.33 (2) of the statutes is amended to read:

AB150,2179,6 551.33 (2) Every licensed broker-dealer and investment adviser shall file such reports as the commissioner department by rule prescribes.

AB150, s. 6704 Section 6704. 551.33 (3) of the statutes is amended to read:

AB150,2179,11 551.33 (3) If the information contained in any application for license or other document filed with the commissioner department or an organization designated under s. 551.32 (1) (a) is or becomes inaccurate or incomplete in any material respect, the licensee shall promptly file a correcting amendment.

AB150, s. 6705 Section 6705. 551.33 (4) of the statutes is amended to read:

AB150,2180,5 551.33 (4) The commissioner department shall make periodic examinations, within or without this state, of the business and records of each licensed broker-dealer and investment adviser, at such times and in such scope as the commissioner department determines. The examinations may be made without prior notice to the broker-dealer or investment adviser. The expense reasonably attributable to any such examination shall be paid by the broker-dealer or investment adviser whose business is examined, but the expense so payable shall not exceed an amount which the commissioner department by rule prescribes. For the purpose of avoiding unnecessary duplication of examinations, the commissioner department, insofar as it is practicable in administering this subsection, may cooperate with securities administrators of other states, the securities and exchange commission, and any national securities exchange or national securities association registered under the securities exchange act of 1934. The commissioner department shall not make public the information obtained in the course of examinations, except when the commissioner's department's duty under this chapter requires the commissioner department to take action regarding any broker-dealer or investment adviser or to make the information available to one of the organizations specified in this subsection, or except when called as a witness in any criminal or civil proceeding.

AB150, s. 6706 Section 6706. 551.33 (5) of the statutes is amended to read:

AB150,2180,9 551.33 (5) The commissioner department may by rule prohibit unreasonable charges, profits, commissions or other compensation of broker-dealers and investment advisers.

AB150, s. 6707 Section 6707. 551.33 (6) of the statutes is amended to read:

AB150,2180,13 551.33 (6) The commissioner department may by rule establish standards for the conduct of business by broker-dealers, agents, investment advisers and clearing corporations as defined in s. 408.102 (1) (c).

AB150, s. 6708 Section 6708. 551.34 (1) (intro.) of the statutes is amended to read:

AB150,2180,21 551.34 (1) (intro.) The commissioner department may by order deny an application for, or postpone the effective date of, a license or suspend or revoke any license or may censure the licensee, if the commissioner department finds that the order is in the public interest and that the applicant or licensee or, in the case of a broker-dealer or investment adviser, any partner, officer or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the broker-dealer or investment adviser:

AB150, s. 6709 Section 6709. 551.34 (1) (e) of the statutes is amended to read:

AB150,2180,25 551.34 (1) (e) Is the subject of an order of the commissioner department denying an application or suspending or revoking a license as a broker-dealer, agent or investment adviser;

AB150, s. 6710 Section 6710. 551.34 (1) (f) of the statutes is amended to read:

AB150,2181,15 551.34 (1) (f) Is the subject of an order entered within the past 5 years by the securities administrator of any other state or by the securities and exchange commission denying, suspending or revoking the person's registration or license as a broker-dealer, agent or investment adviser, or is the subject of an order of the securities and exchange commission or of a securities exchange or association registered under the securities exchange act of 1934 suspending or expelling such person from a securities exchange or association or forbidding the association or affiliation of the person with a broker-dealer or investment adviser, or is the subject of a U.S. postal service fraud order. The commissioner department may not institute a revocation or suspension proceeding under this paragraph more than one year from the date of the order relied on, and the commissioner department may not enter an order under this paragraph on the basis of an order under another state law or federal law unless the order was based on facts which would currently constitute a ground for an order under this section;

AB150, s. 6711 Section 6711. 551.34 (1) (k) of the statutes is amended to read:

AB150,2181,18 551.34 (1) (k) Has failed to pay the proper filing fee, but the commissioner department shall vacate any such order when the deficiency has been corrected;

AB150, s. 6712 Section 6712. 551.34 (1) (m) of the statutes is amended to read:

AB150,2181,23 551.34 (1) (m) Has made any material misrepresentation to or withheld or concealed any material fact from the commissioner or any of his or her representatives department, or has refused to furnish information reasonably requested by the commissioner department; or

AB150, s. 6713 Section 6713. 551.34 (2) of the statutes is amended to read:

AB150,2182,5 551.34 (2) The enumeration of the causes stated in sub. (1) shall not be exclusive and the commissioner department may deny an application or suspend or revoke any license or censure any licensee for any cause whether similar to or different from these causes when necessary or appropriate in the public interest or for the protection of investors.

AB150, s. 6714 Section 6714. 551.34 (3) of the statutes is amended to read:

AB150,2182,10 551.34 (3) The commissioner department may not institute a suspension or revocation proceeding on the basis of a fact or transaction known to the commissioner department when the license was issued unless the proceeding is instituted within 180 days following issuance of the license.

AB150, s. 6715 Section 6715. 551.34 (4) of the statutes is amended to read:

AB150,2182,16 551.34 (4) If the public interest or the protection of investors so requires, the commissioner department may by order summarily deny or suspend a license or postpone the effective date of a license. Upon the entry of the order, the commissioner department shall serve upon all named parties a copy of the order and notify the parties of their right to request a hearing.

AB150, s. 6716 Section 6716. 551.34 (5) of the statutes is amended to read:

AB150,2182,23 551.34 (5) If the commissioner department finds that any licensee or applicant is no longer in existence or has ceased to do business as a broker-dealer, agent or investment adviser, or is subject to an adjudication of mental incompetence or to the control of a committee, conservator or guardian, or cannot be located after reasonable search, the commissioner department may on order issued summarily revoke the license or deny the application.

AB150, s. 6717 Section 6717. 551.34 (6) of the statutes is amended to read:

AB150,2183,15 551.34 (6) Withdrawal from the status of a licensed broker-dealer, agent or investment adviser becomes effective 30 days after receipt by the commissioner department or by an organization designated by rule of the commissioner department under s. 551.32 (1) (a) of an application to withdraw or within such shorter period as the commissioner department determines, unless a revocation or suspension proceeding is pending when the application is filed or a proceeding to revoke or suspend or to impose conditions upon the withdrawal is instituted within 30 days after the application is filed. If a proceeding is pending or instituted, withdrawal becomes effective at such time and upon such conditions as the commissioner department by order determines. If no proceeding is pending or instituted and withdrawal automatically becomes effective, the commissioner department may institute a revocation or suspension proceeding for the grounds specified under sub. (1) (b), (g), (m) or (n) within one year after withdrawal became effective and enter a revocation or suspension order as of the last date on which the license was in effect.

AB150, s. 6718 Section 6718. 551.43 of the statutes is amended to read:

AB150,2183,21 551.43 Broker-dealer activities. It is unlawful for a broker-dealer to effect in this state any transaction in, or to induce the purchase or sale of, any security by means of any manipulative, deceptive or other fraudulent device or contrivance, including any fictitious quotation. The commissioner department may by rule define the terms "manipulative, deceptive or other fraudulent device or contrivance".

AB150, s. 6719 Section 6719. 551.44 of the statutes is amended to read:

AB150,2184,6 551.44 Advisory activities. It is unlawful for any person who receives any consideration from another person primarily for advising the other person as to the value of securities or their purchase or sale, whether through the issuance of analyses or reports or otherwise, in this state, to employ any device, scheme or artifice to defraud the other person; or engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon the other person; or take or have custody of any securities or funds of any client unless the adviser is licensed as a broker-dealer under this chapter. The commissioner department may adopt rules defining the terms used in this section.

AB150, s. 6720 Section 6720. 551.51 (1) of the statutes is amended to read:

AB150,2184,12 551.51 (1) This chapter shall be administered by the commissioner of securities. The commissioner shall appoint a deputy commissioner, subject to s. 15.04 (2) and (3). The commissioner may designate the deputy commissioner or any employe to perform any duty or exercise any power or function assigned to the commissioner when he or she is absent from the office department.

AB150, s. 6721 Section 6721. 551.51 (2) of the statutes is amended to read:

AB150,2185,2 551.51 (2) It is unlawful for the commissioner department or any officers or employes of the office of the commissioner department to use for personal benefit any information which is filed with or obtained by the commissioner department or an organization designated under s. 551.32 (1) (a) and which is not generally available to the public. Nothing in this chapter authorizes the commissioner department or any officers or employes of the office of the commissioner department to disclose any confidential information except among themselves or to other securities administrators or regulatory authorities or when necessary or appropriate in a proceeding or investigation under this chapter. No provision of this chapter either creates or derogates from any privilege which exists at common law or otherwise when documentary or other evidence is sought under a subpoena directed to the commissioner department or any officers or employes of the office of the commissioner department.

AB150, s. 6722 Section 6722. 551.52 (1) (b) (intro.) of the statutes is amended to read:

AB150,2185,11 551.52 (1) (b) (intro.) An indefinite amount of securities shall be registered under a registration statement relating to redeemable securities issued by an open-end management company or a face amount certificate company, as defined in the investment company act of 1940, and the applicant shall pay the fee under par. (a). The registrant also shall, within 60 days after the end of each fiscal year during which its registration statement is effective and within 60 days after the registration is terminated, file a report on a form prescribed by rule of the commissioner department in which the registrant does any of the following:

AB150, s. 6723 Section 6723. 551.52 (3) of the statutes is amended to read:

AB150,2185,16 551.52 (3) The expenses reasonably attributable to the examination of any matter arising under this chapter shall be charged to the applicant, registrant or licensee involved, but the expenses so charged shall not exceed such maximum amounts as the commissioner department by rule prescribes.

AB150, s. 6724 Section 6724. 551.52 (4) of the statutes is amended to read:

AB150,2185,21 551.52 (4) The commissioner department may by rule require the payment of prescribed fees for delinquent or materially deficient filings of information or documents required under this chapter to be filed with the commissioner department or an organization designated under s. 551.32 (1) (a).