Sections 85.16 (1), 85.20 and 227.11 (2), Stats.
Estimate of the amount of time that state employees will spend developing the rule and of other resources necessary to develop the rule:
200 person hours.
Submittal of Rules to Legislative Council Clearinghouse
Notice of Submittal of Proposed Rules to
Wisconsin Legislative Council Rules Clearinghouse
Please check the Bulletin of Proceedings for further information on a particular rule.
Employe Trust Funds
Rule Submittal Date
Notice is hereby given that on July 19, 2000 the Department of Employe Trust Funds submitted to the Wisconsin Legislative Council Rules Clearinghouse a proposed order affecting s. ETF 10.10.
Analysis
The subject matter of the proposed rule relates to election procedures for the Employe Trust Funds Board.
Agency Procedure for Promulgation
A public hearing will not be scheduled pursuant to s. 227.16 (2) (b), Stats.
Contact Information
If you have any questions, you may contact:
Pam Henning
Director of Legislation and Planning
Dept. of Employe Trust Funds
Telephone: (608) 267-2929
N o t i c e S e c t i o n
Notice of Hearing
Financial Institutions--Securities
Notice is hereby given that pursuant to ss. 551.63 (1), (2) and (3), 551.23 (8) (f) and (g) and (18), 551.26 (1), 551.32 (7), 551.33 (1), (2) and (6), and 551.53 (1) (b), Stats., the Division of Securities of the Department of Financial Institutions will hold a public hearing at the time and place indicated below to consider the adoption, amendment and repeal of rules in connection with its annual review of the administrative rules of the Division of Securities relating to the operation of ch. 551, Stats., the Wisconsin Uniform Securities Law.
Hearing Information
The public hearing will be held:
Date & Time Location
September 25, 2000 Conference Room
Monday 4th Floor
Beginning at 345 West Washington Ave.
10:30 a.m. MADISON, WI
Written Comments
Written comments in lieu of public hearing testimony may be submitted which must be received no later than the hearing date and should be addressed to the Administrator of the Division of Securities, 345 West Washington Avenue, P.O. Box 1768, Madison WI 53701.
Analysis Prepared by the Division of Securities
Statutory authority: ss. 551.63 (1), (2) and (3), 551.23 (8) (f) and (g) and (18), 551.26 (1), 551.32 (7), 551.33 (1), (2) and (6), and 551.53 (1) (b)
Statutes interpreted: ss. 551.23 (1), (8) (f) and (g) and (18), 551.32 (7), 551.33 (1), (2) and (6), and 551.53 (1) (b)
The rule-making procedures under ch. 227, Stats., are being implemented for the purpose of effectuating the Division's annual review of the Rules of the Division of Securities. The Division's annual rule revision process is conducted for the following purposes:
1) Developing new securities registration exemptions and making modifications to several existing securities registration exemptions to reflect new legal or interpretive issues under the federal and state securities laws; and
2) Adopting new rules, or amending existing rules, relating to the securities broker-dealer, agent, investment adviser, and investment adviser representative licensing procedures, record-keeping requirements and rules of conduct provisions, to effectively regulate new securities licensing developments that have occurred in the securities industry and marketplace that require regulatory treatment.
Proposed revisions are being made in a total of over 15 different sections. A summary of the subject matter and nature of the more significant rule revisions follows:
1)
Revising the “isolated nonissuer transaction" exempt transaction rule in s. DFI-Sec 2.02 (1) (intro.) to clarify that only the specific examples set forth in sub. (1) (a) and (b) qualify for purposes of the rule;
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;
6) 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.
Fiscal Estimate
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
1.
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.
Contact Information
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
