551.27(9)
(9) The division may by rule or order require as a condition of registration that any security registered be sold only on a specified form of subscription or sale contract, and that a signed or conformed copy of each contract be filed with the division or preserved for any period up to 3 years.
551.27(10)
(10) The division may by rule or order impose other conditions under which a security registered by qualification or coordination may be sold, if these conditions are reasonable and in the public interest.
551.27(11)
(11) A registration statement is effective for one year from its effective date unless extended by rule or order of the division. All outstanding securities of the same class as a registered security are considered to be registered for the purpose of any transaction by or on behalf of a person not the issuer and not in control of the issuer or controlled by the issuer or under common control with the issuer, so long as the registration statement is effective, unless otherwise prescribed by order. A registration statement may not be withdrawn after its effective date if any of the securities registered have been sold in this state, unless permitted by rule or order of the division. No registration statement is effective during the time a stop order is in effect under
s. 551.28.
551.27(12)
(12) During the effective period of a registration statement, the division may by rule or order require the person who filed the registration statement to file reports, not more often than quarterly, to keep reasonably current the information contained in the registration statement and to disclose the progress of the offering. If any of the securities registered have been sold in the state, the division may by rule or order extend the period for filing the reports for an additional period not exceeding 2 years from the date the registration became effective or the date of its last amendment or extension.
551.27(13)(a)(a) Securities issued or guaranteed by an insurer authorized by the commissioner of insurance, or by a person whose business consists principally of owning or controlling the securities of any such insurer, may not be registered without the prior approval of the commissioner of insurance. Issuance of an organization permit under
s. 611.13,
613.13 or
614.13 constitutes such approval for the securities described in the permit, and also precludes application of
s. 551.28 (1) (d).
551.27(13)(b)
(b) No issuer which is being organized in this state or elsewhere solely or partly for the purpose of organizing a corporation under
ch. 611,
613 or
614 may register or sell its securities in this state unless it obtains an organization permit under
s. 611.13,
613.13 or
614.13. No security may be registered or sold in this state if there is any representation that an insurer will be organized or purchased in this state with the proceeds of the sale, unless the issuer obtains an organization permit under
s. 611.13,
613.13 or
614.13.
551.27(14)
(14) A registration statement relating to securities issued by any class of financial institutions, which the division by rule determines, may be amended after its effective date so as to increase the specified amount of securities proposed to be offered. The amendment becomes effective when the division so orders.
551.27(15)
(15) No warrant or right to purchase or subscribe to another security and no security convertible into another security shall be registered unless it appears to the division that both the warrant or right or convertible security and the securities deliverable on the exercise of the warrant or right or conversion privilege comply with this chapter.
551.27 Cross-reference
Cross Reference: See also ch.
DFI-Sec 3, Wis. adm. code.
551.27 Annotation
Blue sky law: Is there merit in the merit requirements? Goodkind, 1976 WLR 79.
551.28
551.28
Denial, suspension and revocation of registrations. 551.28(1)(1) The division may issue a stop order denying effectiveness to, or suspending or revoking the effectiveness of, any registration statement if the division finds that the order is in the public interest and that:
551.28(1)(a)
(a) The registration statement as of its effective date or as of any earlier date in the case of an order denying effectiveness, or any amendment filed under
s. 551.27 (14) as of its effective date, or any report under
s. 551.27 (12) is incomplete in any material respect or contains any statement which was, in the light of the circumstances under which it was made, false or misleading with respect to any material fact;
551.28(1)(b)
(b) Any provision of this chapter or any rule, order or condition lawfully imposed under this chapter has been willfully violated, in connection with the offering, by the person filing the registration statement; the issuer, any partner, officer or director of the issuer, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling or controlled by the issuer, but only if the person filing the registration statement is directly or indirectly controlled by the issuer; or any broker-dealer or other person involved directly or indirectly in the offering;
551.28(1)(c)
(c) The securities are the subject of an administrative stop order or similar order or a permanent or temporary injunction of any court of competent jurisdiction entered under any other federal or state act applicable to the offering, but the division may not institute a proceeding against an effective registration statement under this paragraph more than one year from the date of the order or injunction relied on, and the division may not enter an order under this paragraph on the basis of an order or injunction entered under any other state act unless that order or injunction was based on facts which would currently constitute a ground for a stop order under this section;
551.28(1)(d)
(d) The issuer's enterprise or method of business includes or would include activities which are illegal where performed;
551.28(1)(e)
(e) The issuance or sale of the securities has worked or tended to work a fraud upon purchasers or would so operate;
551.28(1)(g)
(g) The applicant or registrant has failed to pay the proper filing fee; but the division may enter only a denial order under this paragraph and the division shall vacate any such order when the deficiency has been corrected;
551.28(1)(h)
(h) Advertising prohibited by
s. 551.53 has been used in connection with the sale or offering of the securities; or
551.28(2)
(2) The division may not institute a stop order proceeding against an effective registration statement on the basis of a fact or transaction known to the division when the registration statement became effective unless the proceeding is instituted within 180 days after the effective date.
551.28(3)
(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 division has the burden of establishing the existence of one of the causes enumerated in
sub. (1).
551.28(4)
(4) If the public interest and the protection of investors so require, the division may, by order, summarily deny, postpone, suspend or revoke the effectiveness of the registration statement. Upon the entry of the order, the division shall serve upon all named parties a copy of the order and notify the parties of their right to request a hearing.
551.28(5)
(5) No stop order may be entered under this section, except under
sub. (4), unless
s. 551.61 (1) is complied with and appropriate prior notice is given to the applicant or registrant, the issuer and the person on whose behalf the securities are to be or have been offered.
551.28(6)
(6) The division may vacate or modify a stop order if the division finds that the conditions which prompted its entry have changed or that it is otherwise in the public interest to do so.
551.28 Cross-reference
Cross Reference: See also ch.
DFI-Sec 3, Wis. adm. code.
551.28 Annotation
Adverse consequences of blue sky regulation of public offering expenses. Mofsky, 1972 WLR 1010.
551.29
551.29
Federal covered securities. 551.29(1)
(1) With respect to a federal covered security that is a covered security under section 18 (b) (2) of the Securities Act of 1933, the division may, by rule or order, require the filing of any of the following:
551.29(1)(a)
(a) Not later than the initial offer of the federal covered security in this state, a copy of each document that is part of its registration statement filed with the federal securities and exchange commission under the Securities Act of 1933, which may, at the option of the issuer, be accompanied by a form containing the information specified by the division by rule. If a filing is required under this paragraph, the filing shall be accompanied by a consent to service of process signed by the issuer and a notice filing fee under
s. 551.52 (1) (a). Any notice filing required under this paragraph is effective upon receipt by the division of the documents and fees required under this paragraph, or upon the effectiveness of the registration statement under the Securities Act of 1933, whichever is later.
551.29(1)(b)
(b) After the initial offer of a federal covered security in this state, a copy of each document that is part of an amendment to its registration statement filed with the federal securities and exchange commission under the Securities Act of 1933, concurrent with the federal filing, which may, at the option of the issuer, be accompanied by a form containing the information specified by the division by rule. If a filing is required under this paragraph and the amendment relates either to a name change of the issuer, or a change in the designation of the federal covered security, the filing shall be accompanied by a fee in the amount prescribed by the rule or order requiring the filing. Unless the issuer requests a later effective date, an amendment filing required under this paragraph is effective upon receipt by the division of the documents and fees required under this paragraph.
551.29(1)(c)
(c) For a unit investment trust or closed-end investment company to extend its offering beyond a one-year period, a notice of extension, together with any filing fee prescribed by rule or order, at the time prescribed by rule or order.
551.29(1m)
(1m) If the division promulgates rules under
sub. (1) (c) for unit investment trusts or closed-end investment companies, the division shall restate in those rules the statutory annual reporting and fee requirements that are applicable to an open-end management company or a face amount certificate company under
s. 551.52 (1) (b) 2.
551.29(2)
(2) With respect to a federal covered security that is a covered security under section 18 (b) (4) (D) of the Securities Act of 1933, the division may, by rule or order, require the issuer to file a notice consisting of a completed Form D as prescribed by Rule 503 of Regulation D under the Securities Act of 1933, signed by the issuer, not later than 15 days after the first sale of the federal covered security in this state. Any filing required under this subsection shall be accompanied by a fee in the amount prescribed by the rule or order requiring the filing. The filing shall be effective upon receipt by the division of the filing and the fee.
551.29(3)
(3) With respect to a federal covered security that is a covered security under section 18 (b) (3) or (4) of the Securities Act of 1933, the division may, by rule or order, require the filing, for purpose of providing notice to the division, of any document filed with the federal securities and exchange commission under the Securities Act of 1933, together with a fee prescribed in the rule or order. The filing is effective upon receipt by the division of the documents and fee required under the rule or order.
551.29(4)
(4) To the extent not prohibited by federal law, if the issuer of a federal covered security does not pay a fee required under this chapter with respect to that security and the nonpayment or underpayment of that fee has not been remedied within 10 days of receipt by the issuer of a written or electronically transmitted notification from the division, the federal covered security may not be offered or sold in this state unless it is registered under this chapter or qualifies for an exemption from registration under
s. 551.22 or
551.23.
551.29(5)
(5) The division may issue an order suspending offers and sales of a federal covered security in this state, except a federal covered security under section 18 (b) (1) of the Securities Act of 1933, if the order is in the public interest and the division has reason to believe that there has been a failure to comply with this section or a rule or order issued under this section. The division may issue an order suspending offers and sales of a federal covered security in this state if the order is in the public interest and the division has reason to believe that the security is being or has been offered or sold in this state in violation of
s. 551.41.
551.29(6)
(6) The division may, by rule or order, waive any requirement under this section or under rules promulgated, or orders issued, under this section.
551.29 History
History: 1997 a. 316;
1999 a. 32.
LICENSING AND NOTICE FILING PROCEDURES; BROKER-DEALERS, AGENTS, INVESTMENT ADVISERS AND INVESTMENT ADVISER REPRESENTATIVES
551.31
551.31
Licensing and notice filing requirements. 551.31(1)(1) Unless exempt from licensing under this subsection, it is unlawful for any person to transact business in this state as a broker-dealer unless licensed under this chapter as a broker-dealer. Unless exempt from licensing under this subsection, it is unlawful for any person to transact business in this state as an agent unless licensed under this chapter as an agent. All of the following persons are exempt from licensing under this subsection:
551.31(1)(a)
(a) A person who effects transactions in this state exclusively for the account of or exclusively in offers to sell or sales to persons specified in
s. 551.23 (8) (a) to
(f).
551.31(1)(b)
(b) A person who gives a group presentation relating to an issuer or the securities of an issuer at a meeting or seminar sponsored by a broker-dealer licensed under this chapter, if the person makes no solicitations, offers or sales of the issuer's securities on an individual basis with any person in this state and if the person does not in any other way transact business in this state as an agent.
551.31(1)(c)
(c) A person who represents a broker-dealer in effecting transactions, if the person meets the requirements under section 15 (h) (2) of the Securities Exchange Act of 1934 and the person's transactions in this state are limited to those transactions described in section 15 (h) (3) of the Securities Exchange Act of 1934.
551.31(1)(d)
(d) An agent who is acting exclusively as an agent representing an issuer of securities and who makes offers and sales of the issuer's securities in transactions that are exempt under
s. 551.23 (8) (g) or under a rule of the division promulgated under
s. 551.23 (18) that specifically exempts transactions involving accredited investors and that is based on a model accredited investor exemption adopted by the North American Securities Administrators Association.
551.31(2)(a)(a) It is unlawful for any broker-dealer or issuer to employ an agent to represent it in this state unless at least one of the following conditions is met:
551.31(2)(a)1.
1. The agent is licensed for that broker-dealer or issuer in this state.
551.31(2)(a)2.
2. The agent is exempted from the licensing requirement under
sub. (1).
551.31(2)(a)3.
3. The agent is not required under
sub. (7) to obtain a separate license to represent that issuer.
551.31(2)(b)
(b) An agent may not at any time represent in this state more than one broker-dealer or issuer and may not simultaneously represent both a broker-dealer and an issuer, except an agent may represent any of the following:
551.31(2)(b)1.
1. Licensed broker-dealers or issuers of securities registered under this chapter, or both, who are affiliated by direct or indirect common control.
551.31(2)(b)2.
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 division and the division, in writing, permits the representation.
551.31(2)(c)
(c) The division shall by rule specify the required contents and form of an application filed under
par. (b) 2.
551.31(2)(d)
(d) When an agent who is required to be licensed under
sub. (1) 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 division.
551.31(3)
(3) Unless exempt from licensing under this subsection, it is unlawful for a person to transact business in this state as an investment adviser unless licensed under this chapter as an investment adviser. All of the following persons are exempt from licensing under this subsection:
551.31(3)(a)
(a) A person who is licensed as a broker-dealer under this chapter.
551.31(3)(c)
(c) A person who has no place of business in this state and, during the preceding 12-month period, has not had more than 5 clients who are residents of this state, exclusive of clients described under
s. 551.23 (8) (a) to
(f).
551.31(3m)
(3m) Unless exempt from licensing under this subsection, it is unlawful for a person to transact business in this state as an investment adviser representative for an investment adviser unless licensed under this chapter as an investment adviser representative. All of the following persons are exempt from licensing under this subsection:
551.31(3m)(a)
(a) A person who is licensed as an agent under this chapter.
551.31(3m)(c)
(c) A person who has no place of business in this state and, during the preceding 12-month period, has not had more than 5 clients who are residents of this state, exclusive of clients described under
s. 551.23 (8) (a) to
(f).
551.31(4)(a)(a) It is unlawful for any investment adviser who is required to be licensed under this chapter to employ an investment adviser representative to represent the investment adviser in this state, unless the investment adviser representative either is licensed for that investment adviser in this state or is a person described under
sub. (3m) (a),
(b) or
(c).
551.31(4)(b)
(b) It is unlawful for any person having a place of business located in this state who is employed or supervised by, or is associated with, a federal covered adviser, to act as an investment adviser representative in this state, unless the investment adviser representative either is licensed in this state or is a person described under
sub. (3m) (a),
(b) or
(c).
551.31(4)(c)1.1. When an investment adviser representative licensed in this state employed by an investment adviser who is required to be licensed under this chapter terminates his or her employment, the investment adviser shall promptly file a notice with the division in accordance with rules promulgated by the division.
551.31(4)(c)2.
2. When an investment adviser representative licensed in this state employed by a federal covered adviser terminates his or her employment, the investment adviser representative shall promptly file a notice with the division in accordance with rules promulgated by the division.
551.31(4m)
(4m) It is unlawful for any federal covered adviser to transact investment advisory business in this state unless one of the following conditions is met:
551.31(4m)(b)
(b) The federal covered adviser has no place of business in this state, and, during the preceding 12-month period, the adviser has not had more than 5 clients who are residents of this state, exclusive of clients described under
s. 551.23 (8) (a) to
(f).
551.31(5)
(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 division.
551.31(6)
(6) It is unlawful for any licensed broker-dealer, agent or investment adviser, or any person directly or indirectly controlling a licensed broker-dealer or investment adviser, to transact business in this state if the licensee is in violation of this chapter, or any rule under this chapter, or any order under this chapter of which the licensee or person has notice, or if the information contained in the licensee's or person's application for license, as of the date of such transactions, is incomplete in any material respect or is false or misleading with respect to any material fact.
551.31(7)
(7) An agent may make offers and sales of securities for more than one issuer that is a limited partnership or for more than one issuer that is an investment company without obtaining a separate license for each limited partnership or investment company represented by the agent if all of the following conditions are satisfied:
551.31(7)(a)
(a) The limited partnerships have the same general partner, or the investment companies have the same investment adviser.
551.31(7)(b)
(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 division before the agent makes any offers or sales in this state on behalf of the additional limited partnership or investment company.
551.31 Annotation
Violators of subs. (1) and (3) are subject to strict liability. What constitutes transacting business as an investment advisor in violation of sub. (3) is discussed. Garretto v. Elite Advisory Services, Inc.,
793 F. 2d 796 (1992).
551.32
551.32
Licensing and notice filing procedure. 551.32(1)(a)(a) A broker-dealer, agent, investment adviser or investment adviser representative may obtain an initial or renewal license by filing with the division, or an organization which the division by rule designates, an application together with a consent to service of process under
s. 551.65 (1).
551.32(1)(b)
(b) An application under
par. (a) shall contain whatever information the division by rule requires concerning the applicant's form and place of organization, proposed method of doing business and financial condition, the qualifications and business history of the applicant, including, in the case of a broker-dealer or investment adviser, the qualifications and business history of any partner, officer, director, or any person occupying a similar status or performing similar functions or any 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 division determines are relevant to the application. The division 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.
