Public notice
Financial Institutions, Division of Securities
Order excluding Canadian broker-dealers from the definition of broker-dealer in certain limited contexts, creating a transactional securities registration exemption for certain transactions and creating an advertising filing exemption.
WHEREAS, the Division of Securities, Department of Financial Institutions, is charged with the administration of ch. 551, Stats., The Wisconsin Uniform Securities Law (the “Law") and s. DFI-Sec 1.01, et. seq. of the Rules of the Division of Securities promulgated under the Law;
WHEREAS, s. 551.63 (1) of the Law provides that “the Division may make, amend and rescind any... orders that are necessary to carry out this chapter...;" s. 551.02 (3) (h) of the Law provides authority to the Division to exclude from the definition of broker-dealer, “persons... whom the Division by rule or order designates;" s. 551.23 (18) of the Law provides authority to the Division to exempt from the securities registration requirement, “... any transaction as to which the Division by rule or order finds that registration is not necessary or appropriate for the protection of investors;" and s. 551.53 (1) (b) of the Law provides authority to the Division to exempt from filing “...advertising ... as the Division ... provides by rule or order."
WHEREAS, the Administrator has determined that it is in the public interest and appropriate for investor protection that certain Canadian broker-dealers and their sales agents be allowed--in the limited contexts as set forth herein--to: (a) transact securities business and effectuate securities transactions without licensure in this state, with certain persons in Wisconsin described with more particularity below, who are either: (i) persons from Canada who are temporarily present in Wisconsin, or are (ii) holders of, or contributors to, self-directed, tax-advantaged Canadian retirement plans; and to: (b) provide a securities registration exemption as well as an advertising filing exemption for the securities transactions effected for such persons in Wisconsin.
NOW, THEREFORE, IT IS ORDERED that:
(a) 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:
1. The broker-dealer effects or attempts to effect transactions in securities only with persons specified in s. 551.23 (8) (a) to (f), Stats., or with or for any of the following:
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; and
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.
2. The broker-dealer is registered with or a member of a self-regulatory organization in Canada, a stock exchange in Canada, or the bureau des services financiers;
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;
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.
(2) Pursuant to s. 551.23 (18) of the Law, an exemption from securities registration in this state is provided for any offer or sale of a security effected by a Canadian broker-dealer excluded from the definition of “broker-dealer" pursuant to paragraph (1) of this Order in transactions with the persons specified in subpar. (1) (a) 1. above.
(3) Pursuant to s. 551.53 (1) (b) of the Law, an exemption from the securities advertising filing requirement thereunder is provided for advertising relating to the securities involved in transactions with the persons specified in subpar. (1) (a) 1. above, effected by a Canadian broker-dealer excluded from the definition of “broker-dealer" pursuant to paragraph (1) of this Order.
Copies of the Order are available free of charge by writing to:
Division of Securities
Department of Financial Institutions
P.O. Box 1768
Madison, WI 53701
