CR 25-045 Rule Text

(b) A letter specifying how the requirements for use of this exemption contained in the introduction and in subs. (1) to (7) are met or will be met; and .

_Hlk168327921 SECTION 46. DFI-Sec 2.029 (title) is amended to read:

DFI-Sec 2.029 (title) Federal regulation D rule 505 exemption by filing Bad actor disqualification.

SECTION 47. DFI-Sec 2.029 (1), (2), (4), (5), and (6) are repealed.

SECTION 48. DFI-Sec 2.029 (3) (a)

DFI-Sec 2.029 (3) (a) Unless the cause for disqualification is waived under par. (b) 2., no exemption under sub. (1) is available for the securities of an issuer unless the issuer did not know and in the exercise of reasonable care could not have known that any of the following applies to any of the persons described in 17 CFR 230.262 (a), (b), or (c):

1. The person has filed a registration statement which is the subject of an effective order entered against the issuer, its officers, directors, general partners, controlling persons, or affiliates thereof, pursuant to any state's law within 5 years before the filing of a notice required under sub. (4) by the division denying effectiveness to, or suspending or revoking the effectiveness of, the registration statement.

2. The person has been convicted of any felony or misdemeanor in connection with the offer, sale, or purchase of any security or franchise, or any felony involving fraud or deceit, including but not limited to forgery, embezzlement, obtaining money under false pretenses, larceny, or conspiracy to defraud.

3. The person is subject to an effective administrative order or judgment entered by a state securities administrator within 5 years before the filing of a notice required under sub. (4) by the division, which prohibits, denies or revokes the use of any exemption from securities registration, which prohibits the transaction of business by the person as a broker-dealer or agent, or which is based on fraud, deceit, an untrue statement of a material fact or an omission to state a material fact.

4. The person is subject to any order, judgment or decree of any court entered within 5 years before the filing of a notice required under sub. (4), temporarily, preliminarily or permanently restraining or enjoining the person from engaging in or continuing any conduct or practice in connection with the offer, sale or purchase of any security, or the making of any false filing with any state.

SECTION 49. DFI-Sec 2.03 is amended to read:

_Hlk194070900 DFI-Sec 2.03 (1) If a notice is required to be filed in order to seek to claim registration exemption status pursuant to s. 551.201, or 551.202, Stats., or rule or order under s. 551.203, Stats., the notice shall consist of a copy of any prospectus, circular or other material to be delivered to offerees, the fee prescribed by under s. DFI-Sec 7.01 (2) (d), and a cover letter describing how the offering will meet all the requirements for use of the exemption sought to be utilized.

(2)If any information is reasonably required by the division prior to the effective date of an exemption, in connection with the examination of any notice filed pursuant to s. 551.201, or 551.202, Stats., or rule or order under s. 551.203, Stats., the notice is not deemed filed until the information so required is filed with the division.

(3) An order of the division disallowing an exemption with respect to a specified security or transaction pursuant to s. 551.201, or 551.202, Stats., or rule or order under s. 551.203, Stats., has the same effect as an order denying or revoking an exemption pursuant to s. 551.204, Stats.

_Hlk198203257 SECTION 50. DFI-Sec 2.04 (1) and (2) (intro.) and (b) are amended to read:

_Hlk194502360 DFI-Sec 2.04 (1) (a) With respect to a federal covered security referred to described in s. 551.302 (1) (a), Stats., unless the security is registered or exempt from registration under s. 551.201, or 551.202, Stats., or rule or order under s. 551.203, Stats., the issuer or a person acting on behalf of the issuer shall file with the division not later than the initial offer of the security in this state, a consent to service of process signed by the issuer and the notice filing fee prescribed under s. DFI-Sec 7.01 (2) (d) 551.614, Stats. If a completed Form NF as prescribed in s. DFI-Sec 9.01 (1) (d) 9.01 is included with the consent to service of process and the notice filing fee, the issuer need not also include with the filing copies of any documents that are part of the registration statement filed under the securities act Securities Act of 1933, although the division may at a later time require the filing of a copy of any document that is part of the registration statement filed under the securities act Securities Act of 1933.

(b) After the initial offer in this state of a federal covered security referred to described in s. 551.302 (1) (a), Stats., if the issuer files an amendment to its registration statement with the U.S. securities and exchange commission under the securities act of 1933 that relates either to a name change of the issuer, or to a change in the designation of the federal covered security, the issuer or a person acting on behalf of the issuer shall file with the division concurrent with the federal filing, a fee of $200 the fee prescribed under s. DFI-Sec 7.01 (2) (d), which shall be accompanied by a copy of each amendment-related document filed with the U.S. securities and exchange commission unless the issuer files with the division a completed Form NF as prescribed in s. DFI-Sec 9.01 (1) (d) ch. 9.01. The division may at a later time require the filing of a copy of any document relating to the amendment filed under the securities act of 1933.

(c) A unit investment trust or closed-end investment company may extend the offering of its securities beyond a one-year period pursuant to s. 551.302 (1) (c), Stats., by filing a notice of extension not less than 30 days prior to the end of one year from the date of filing of the initial notice with the division, or an extension notice filed under this paragraph, whichever is most recent. A notice shall consist of a copy of an updated Form NF as prescribed in s. DFI-Sec 9.01 (1) (d) ch. 9.01, together with a fee of $200 the fee prescribed under s. DFI-Sec 7.01 (2) (d), and at the option of the filing party, a cover letter identifying the most recent prior filing status with the division for the issuer's securities.

(2) (intro.) With respect to a federal covered security referred to described in s. 551.302 (3), Stats., unless the security is registered or exempt from registration under s. 551.201, or 551.202, Stats., or rule or order under s. 551.203, Stats., the issuer or a person acting on behalf of the issuer shall make a filing file with the division not later than 15 days after the first sale of the security in this state that meets the requirements of either of the following:

(b) An electronic filing under the Electronic Filing of Form D (EFD) System developed by the North American Securities Administrators Association and operated by PNC Global Investment Servicing or its affiliate, that designates Wisconsin as a state in which the offering is or will be made, and allocates to Wisconsin a $200 fee the fee prescribed under s. DFI-Sec 7.01 (2) (d) .

SECTION 51. DFI-Sec 2.05 (title) is created to read:

DFI-Sec 2.05 (title) Availability of registration exemption.

SECTION 51. DFI-Sec 3.01 (intro.) is renumbered DFI-Sec 3.01 (1) (intro.), and, as renumbered, is amended to read:

DFI-Sec 3.01 (1) (intro.) A registration statement under s. 551.303, Stats., shall be submitted on Form U-1, shall contain the following information, and shall be accompanied by all the following documents in addition to the information specified in ss. 551.303 (2) and 551.305, Stats.:

_Hlk168488867 SECTION 52. DFI-Sec 3.01 (1) (a) and (2) are amended to read:

DFI-Sec 3.01 (1) (a) If the security to be registered is a note, bond, debenture, or other evidence of indebtedness, a trust indenture meeting the requirements of s. DFI-Sec 3.04, unless the requirement to furnish a trust indenture relating to the securities is waived by the division for good cause shown; and .

(2) In any offering for which a registration statement on U.S. securities and exchange commission Form F-7, F-8, F-9 or F-10 has been filed by coordination with the division, the requirement in s. 551.303 (3) (b), Stats., that a registration statement be on file with the division for at least 10 20 days is reduced to a requirement that the registration statement be on file with the division for at least 7 days.

SECTION 53. DFI-Sec 3.02 (1) is amended to read:

DFI-Sec 3.02 (1) A Subject to sub. (2), a registration statement under s. 551.304 (2), Stats., shall be submitted on Form U-1, shall contain the information prescribed in ss. 551.304 (2) and 551.305, Stats., and if the security to be registered is a note, bond, debenture, or other evidence of indebtedness, a trust indenture meeting the requirements of s. DFI-Sec 3.04, unless the requirement to furnish a trust indenture relating to the securities is waived by the division for good cause shown.

_Hlk168490425 SECTION 54. DFI-Sec 3.03 (1) (a) to (c), (2) (a) to (g), (3), and (4) (intro.) are amended to read:

_Hlk168490361 DFI-Sec 3.03 (1) (a) Any written offer made to the person, otherwise other than by means of public advertisement;.

_Hlk168491047 (b) Confirmation of any sale to the person; .

(c) Payment pursuant to any sale to the person; or.

(2) (a) Name and location of issuer and its type of organization ;.

(b) Designation of securities offered ;.

(c) Per share or unit and aggregate public offering price, underwriting or selling commissions, and discounts and net proceeds to offeror;.

(d) Name of managing underwriter or broker-dealer or statement that the securities are being offered by the issuer;.

(e) A statement describing the anticipated secondary market for the securities being offered, including the identity of anticipated market makers;.

(f) Date of prospectus;.

(g) If the offering is the subject of a registration statement under the securities act of 1933, the following statements in bold-face type:

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.;

(3) The prospectus shall contain a full disclosure of all material facts relating to the issuer and the offering and sale of the registered securities. A prospectus meeting the requirements under the securities act of 1933 that receives full review by the U.S. securities and exchange commission, shall not be subject to disclosure adequacy review or comment by the division. If the offering is being made pursuant to use of either Regulation A or Rule 504 of Regulation D under the securities act of 1933 or Rule 147 under section 3 (a) (11) of the securities act of 1933, the form U-7 disclosure document as adopted in amended form on September 28, 1999 by the North American Securities Administrators Association, Inc. may be used.

(4) (intro.) The disclosure-related provisions of the following guidelines or statements of policy of the North American Securities Administrators Association or other state securities organization listed, may be used by the division for purposes of reviewing the adequacy of disclosure in the prospectus filed with the registration application: .

SECTION 55. DFI-Sec 3.03 (4) (a) to (q) are repealed.

SECTION 56. DFI-Sec 3.03 (4) Note is amended to read:

DFI-Sec 3.03 (4) Note: All of the NASAA Guidelines are published in CCH NASAA Reports published by Commerce Clearing House and are on file at the offices of the Wisconsin secretary of state and the legislative reference bureau available for review on the NASAA website at www.nasaa.org.

SECTION 57. DFI-Sec 3.03 (5) is amended to read:

DFI-Sec 3.03 (5) Unless otherwise permitted by the division, the body of the prospectus and all notes to financial statements and other included tabular data included therein shall be in roman or gothic type at least as large and as legible as 10-point modern type, except that financial statements and other tabular data, including tabular data in notes, may be in roman or gothic type at least as large and as legible as 8-point modern type. All such type shall be leaded at least 2 points.

SECTION 58. DFI-Sec 3.04 is amended to read:

DFI-Sec 3.04 Trust indentures required under ch. 551, Stats., and chs. DFI-Sec 1 to 9, shall meet the requirements of the trust indenture act Trust Indenture Act of 1939, whether or not exempt under that act, unless the division otherwise permits or requires.

_Hlk197095439 SECTION 59. DFI-Sec 3.05 (3) is amended to read:

DFI-Sec 3.05 (3) The division may institute a proceeding under s. 551.306, Stats., and may issue a stop order suspending or revoking the effectiveness of any registration statement filed under s. 551.303 or 551.304, Stats., at any time during the period that the registration statement is effective and within one year thereafter.

SECTION 60. DFI-Sec 3.07 is amended to read:

DFI-Sec 3.07 (1) Application for an extension of the offering period of a registration statement, except one relating to securities of a finance company registered licensed under s. 138.09, Stats., shall be filed in the form prescribed by the division not less than 30 days prior to the end of one year from the effective date of the registration statement or an extended period of effectiveness for the registration statement, whichever is most recent. The application shall be accompanied by a prospectus updated in accordance with s. DFI-Sec 3.03 (6), a balance sheet of the issuer as of the end of its most recent fiscal year, and a comparative statement of income and changes in financial position and analysis of surplus for each of the 3 most recent fiscal years (or for the period of the issuer’s and any predecessor’s existence if less than 3 years), all meeting the requirements of s. DFI-Sec 7.06, provided that if the date of any of the above financial statements is more than 120 days (180 days with respect to a corporation organized and operated not for private profit but exclusively for religious, educational, benevolent, or charitable purposes) prior to the date of the extension of the registration statement, the statements shall be updated (which may be done without audit) to within the 120-day or 180-day requirement above. If no order specifying a different effectiveness period is in effect, renewal of the registration statement becomes effective on the day on which the prior registration statement expires or at such earlier time as the division determines.

(2) A registration statement relating to securities of a finance company registered [licensed] licensed under s. 138.09, Stats., is deemed to include an application for the continuous offering of the securities. The offering period of the registration statement is automatically extended until it is permitted to be withdrawn or the division issues a stop order suspending or revoking its effectiveness pursuant to s. 551.306, Stats., if the issuer files with the division not less than annually during the offering period, within 120 days of the end of its fiscal year, a prospectus updated in accordance with s. DFI-Sec 3.03 (6), a balance sheet of the issuer as of the end of the fiscal year, and a statement of income and change in financial position and analysis of surplus of the issuer for the fiscal year meeting the requirements of s. DFI-Sec 7.06.

Note: The correct word is shown in brackets.

_Hlk168564394 SECTION 61. DFI-Sec 4.01 (1) (a) is amended to read:

DFI-Sec 4.01 (1) (a) (intro.) Applications for initial and renewal registrations of broker-dealers and agents, as well as amendments, reports, notices, related filings, and fees, shall be filed with all of the following:

1. The division on forms prescribed by the division in s. DFI-Sec 9.01 (1); or 9.

_Hlk174718144 2. The central registration depository of the financial industry regulatory authority Financial Industry Regulatory Authority as developed under contract with the North American securities administrators association Securities Administrators Association, on forms established for the central registration depository.

SECTION 62. DFI-Sec 4.01 (1) (c) is created to read:

DFI-Sec 4.01 (1) (c) A broker-dealer may not register with the division, or continue to be registered with the division, unless the broker-dealer is registered with the Financial Industry Regulatory Authority and maintains that registration.

SECTION 63. DFI-Sec 4.01 (2) (a), (b), and (c) and (3) (intro.) are amended to read:

_Hlk168564926 DFI-Sec 4.01 (2) (a) Except as provided in par. (b), an “application" for purposes of s. 551.406 (1), Stats., means all information required by the form prescribed under sub. (1) s. 551.406 (1), Stats., together with any additional information required by the division.

(b) An application for initial registration or for renewal of a registration as a broker-dealer registered with the financial industry regulatory authority Financial Industry Regulatory Authority includes the payment of the Wisconsin broker-dealer registration fee and, in the case of an initial application, the examination fee prescribed by s. DFI-Sec 7.01 (3) (a), to the central registration depository of the financial industry regulatory authority Financial Industry Regulatory Authority. An application for initial registration as a broker-dealer under this paragraph shall be deemed filed under s. 551.406 (1), Stats., on the date the application is transferred from “NO STATUS" to “PENDING" on the records of the central registration depository. An application for renewal of a registration as a broker-dealer under this paragraph shall be deemed filed under s. 551.406 (1), Stats., when the fee on deposit with the central registration depository has been allocated to the division.

(c) An “application" for initial registration or for renewal of a registration as a securities agent for a broker-dealer registered with the financial industry regulatory authority Financial Industry Regulatory Authority includes the payment of Wisconsin agent registration fees to the central registration depository. An application for initial registration as an agent under this paragraph shall be deemed “filed" under s. 551.406 (1), Stats., on the date when the application is designated ready for approval on the records of the central registration depository. An application for renewal of a registration as an agent under this paragraph shall be deemed “filed" under s. 551.406 (1), Stats., when the fee on deposit with the central registration depository has been allocated to the division.

(3) (intro.) Unless waived under sub. (4) and subject to sub. (3) (m), each applicant for an initial registration as a broker-dealer or agent is required to take and pass within the two year period immediately preceding the “FILING DATE" of the application reflected on the records of the central registration depository, either the Series 63 Uniform Securities Agent State Law Examination or the Series 66 Uniform Combined State Law Examination, and take and pass within the that same two year period immediately preceding the “FILING DATE" of the application reflected on the records of the central registration depository, or receive a waiver from passing, the general securities business examinations in par. (a), unless the applicant's proposed securities activities will be restricted, in which case the applicant is required to take and pass , or receive a waiver from passing, each examination in pars. (b) to (h) one of the FINRA representative level examinations listed in this subsection that relates to the applicant's proposed securities activities:

_Hlk175046627 SECTION 64. DFI-Sec 4.01 (3) (e), (f), and (g) are repealed.

SECTION 65. DFI-Sec 4.01 (3) (h) is renumbered DFI-Sec 4.01 (3) (dm).

SECTION 66. DFI-Sec 4.01 (3m) is created to be:

DFI-Sec 4.01 (3m) Each applicant for an initial registration as a broker-dealer or agent is required to pass or receive credit for the FINRA Securities Industry Essentials examination.

SECTION 67. DFI-Sec 4.01 (4) (intro.), (b) (intro.), and 2. are amended to read:

DFI-Sec 4.01 (4) (intro.) The examination requirement in sub. (3) is waived for any applicant who meets the criteria set forth in any one of the paragraphs in this subsection following criteria:

(b) (intro.) The applicant has been registered within 2 years prior to the date the application is filed in this state, as an agent or as a broker-dealer under the securities law of another state and the following applicable conditions are met:

2. In the case of examinations required by sub. (3) (a) to (e), the applicant has been registered with the financial industry regulatory authority Financial Industry Regulatory Authority to engage in the type of business for which the applicant is applying for registration within 2 years prior to the date of filing of the application for registration.

SECTION 68. DFI-Sec 4.01 (4) (c) is repealed.

SECTION 69. DFI-Sec 4.01 (4) (e) and (f) are amended to read:

DFI-Sec 4.01 (4) (e) The applicant is currently registered and in good standing with The Securities and Futures the Financial Conduct Authority of Great Britain and has passed the Series 17 Modified General Securities Representative Qualification Examination qualification examination for United Kingdom Representatives representatives, and either the Series 63 Uniform Securities Agent State Law Examination or the Series 66 Uniform Combined State Law Examination, except that the applicant's activities may not include the offer and sale of municipal Securities securities unless the applicant passes the examination listed in sub. (3) (d).

(f) The applicant is currently registered and in good standing as an agent with any Canadian stock exchange or with a securities regulator of any Canadian province or territory, or with the Investment Dealers Association Industry Regulatory Organization of Canada and has passed either the Series 37 or Series 38 Canada modules of the Series 7 general securities representative qualification examination for Canadian representatives, and either the Series 63 Uniform Securities Agent State Law Examination or the Series 66 Uniform Combined State Law Examination, except that the applicant's activities may not include the offer and sale of municipal securities unless the applicant passes the examination listed in sub. (3) (d).

SECTION 70. DFI-Sec 4.01 (4) (g) is created to read:

DFI-Sec 4.01 (4) (g) The applicant has not been registered as an agent in any state for more than two years but less than five years and has elected to participate in the FINRA Maintaining Qualifications Program pursuant to FINRA Rule 1240(c), and the applicant’s appropriate FINRA qualifying examinations remain valid pursuant to effective participation in the FINRA Maintaining Qualifications Program. The applicant shall be deemed in compliance with the examination requirements of sub. (3) if the applicant elected to participate in the NASAA Examination Validity Extension Program within two years of their agent registration termination and the applicant was registered as an agent in at least one state for at least one year immediately preceding the agent registration termination.

SECTION 71. DFI-Sec 4.01 (5), (7) and Note, and (8) (intro.), (a), (c), and (d) are amended to read:

DFI-Sec 4.01 (5) Any application for registration which is not completed or withdrawn within 6 months from the date it is initially received may be deemed materially incomplete, and the division may issue an order denying the registration or entering a record to the central registration depository that the application was abandoned.

_Hlk168998294 (7) A securities agent registration is effective to authorize the licensee [registrant] registrant to effectuate transactions only in the types of categories of securities that the licensee [registrant] registrant has been qualified to sell by passing the examinations specified in sub. (3).

Note: The correct word is shown in brackets.

(8) (intro.) For an agent to simultaneously represent in this state more than one broker-dealer pursuant to s. 551.402 (5), Stats., or an issuer pursuant to s. 551.402 (6), Stats., the agent shall meet the following requirements shall be met, in addition to the regular agent registration requirements:

(a) Each broker-dealer or issuer that the agent represents shall sign on a form designated by the division in s. DFI-Sec 9.01 (1) (b) DFI-Sec 9, a written grant of permission to the agent to represent the other employers. The written grant of permission shall include the identity of all other securities employment affiliations of the agent and contain a listing of all restrictions on the agent's securities activities imposed by the agent's employers.

(c) The agent shall file the manually signed original of the form under par. (a) shall be filed with the division together with a written application, which may be in letter form, on behalf of the agent to simultaneously represent more than one broker-dealer or issuer. The division shall must approve the application in writing prior to the agent's transacting securities business while simultaneously representing more than one broker-dealer or issuer.

(d) Written An agent shall provide to each securities customer of the agent written disclosure shall be provided regarding the agent's simultaneous representation of more than one broker-dealer or issuer, including the information in par. (a), to each securities customer of the agent not later than the date of receipt of the confirmation for the first securities transaction for the account of the customer by the agent after dual registration is approved by the division.