AB875: Bill Text

LRB-2505/6

RJM:rs&kmg:pg

2001 - 2002 LEGISLATURE

2001 Assembly BILL 875

March 4, 2002 - Introduced by Representatives Jeskewitz, Plale and Townsend, cosponsored by Senators Erpenbach and Huelsman. Referred to Committee on Financial Institutions.

AB875,1,3 An Act to create 551.23 (20) and 551.31 (1) (d) and (e) of the statutes; relating to: creating an exemption from securities broker-dealer and securities agent licensing requirements.

Analysis by the Legislative Reference Bureau

With certain exceptions, current law requires securities broker-dealers and their agents who transact securities business in this state to be licensed with the division of securities in the department of financial institutions. This bill exempts certain Canadian broker-dealers and their agents from this licensing requirement. The bill specifies conditions that broker-dealers and their agents must satisfy to qualify for the licensing exemption. For example, in addition to other requirements, broker-dealers must be located in Canada and have no office or other physical presence in this state and must effect or attempt to effect only transactions with specified financial entities or with certain current or former residents of Canada or persons with certain retirement plans in Canada. To qualify for the licensing exemption, securities agents, in addition to other requirements, must act on behalf of broker-dealers that qualify for the licensing exemption.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB875, s. 1 Section 1. 551.23 (20) of the statutes is created to read:

AB875,2,3 551.23 (20) Any offer or sale of a security effected by a broker-dealer that is exempt from licensing under s. 551.31 (1) (d).

AB875, s. 2 Section 2. 551.31 (1) (d) and (e) of the statutes are created to read:

AB875,2,6 551.31 (1) (d) A broker-dealer located in Canada that has no office or other physical presence in this state and that satisfies all of the following conditions:

AB875,2,8 1. The broker-dealer effects or attempts to effect only transactions in securities with a person specified in s. 551.23 (8) (a) to (f) or with or for any of the following:

AB875,2,11 a. A person who is in this state temporarily and who, while a resident of Canada and before entering this state, established a bona fide business-client relationship with the broker-dealer.

AB875,2,14 b. A person who is present in this state, whose transactions are in a self-directed, tax-advantaged retirement plan in Canada of which the person is the holder or contributor.

AB875,2,16 2. The broker-dealer is registered with or a member of a self-regulatory organization, a stock exchange in Canada, or the bureau des services financiers.

AB875,2,19 3. The broker-dealer maintains in good standing its provincial or territorial registration in Canada and its registration with or membership in a self-regulatory organization, a stock exchange, or the bureau des services financiers.

AB875,2,22 4. The broker-dealer discloses to each customer in this state that the broker-dealer and its agents are not licensed under the Wisconsin Uniform Securities Law.

AB875,2,24 (e) An agent who represents a broker-dealer that is exempt from licensing under par. (d), if the agent satisfies all of the following conditions:

AB875,3,2 1. The transactions effected by the agent for persons in this state are limited to transactions for or with persons described in par. (d) 1.

AB875,3,4 2. The agent maintains in good standing his or her provincial or territorial registration in Canada.

AB875,3,5 (End)