551.202(7)
(7) A nonissuer transaction executed by a bona fide pledgee without the purpose of evading this chapter.
551.202(8)
(8) A nonissuer transaction by a federal covered investment adviser with investments under management in excess of $100,000,000 acting in the exercise of discretionary authority in a signed record for the account of others.
551.202(9)
(9) A transaction in a security, whether or not the security or transaction is otherwise exempt, in exchange for one or more bona fide outstanding securities, claims, or property interests, or partly in such exchange and partly for cash, if the terms and conditions of the issuance and exchange or the delivery and exchange and the fairness of the terms and conditions have been approved by the administrator after a hearing.
551.202(10)
(10) A transaction between the issuer or other person on whose behalf the offering is made and an underwriter, or among underwriters.
551.202(11)
(11) A transaction in a note, bond, debenture, or other evidence of indebtedness secured by a mortgage or other security agreement if all of the following apply:
551.202(11)(a)
(a) The note, bond, debenture, or other evidence of indebtedness is offered and sold with the mortgage or other security agreement as a unit.
551.202(11)(b)
(b) A general solicitation or general advertisement of the transaction is not made.
551.202(11)(c)
(c) A commission or other remuneration is not paid or given, directly or indirectly, to a person not registered under this chapter as a broker-dealer or as an agent.
551.202(12)
(12) A transaction by an executor, administrator of an estate, sheriff, marshal, receiver, trustee in bankruptcy, guardian, or conservator.
551.202(13)
(13) A sale or offer to sell to any of the following:
551.202(13)(am)
(am) An accredited investor, as defined in Rule 501 (a) adopted under the Securities Act of 1933 (
17 CFR 230.501 (a)), provided that prior to the sale in this state to an accredited investor described in Rule 501 (a) (5) or (6) adopted under the Securities Act of 1933, the seller files a consent to service of process with the administrator in the form required under
s. 551.611. Failure to file the consent as required is a cause for administrative action by the administrator under
s. 551.604 but does not result in the loss of this exemption. This consent is not required to be filed if any of the following apply:
551.202(13)(am)1.
1. The issuer of the securities to be sold has its principal place of business or a majority of its full-time employees located in this state.
551.202(13)(am)2.
2. The issuer or seller of the securities files or has previously filed a consent to service of process with the administrator.
551.202(13)(am)3.
3. The seller is a broker-dealer or agent of the issuer registered under this chapter.
551.202(13)(c)
(c) Any other person exempted by rule adopted or order issued under this chapter.
551.202(14)(a)(a) Subject to
par. (b), any transaction pursuant to an offer directed by the offeror to not more than 25 persons in this state excluding those persons designated in
sub. (13) but including persons exempt under
sub. (24), during any period of 12 consecutive months whether or not the offeror or any of the offerees is then present in this state if all of the following apply:
551.202(14)(a)1.
1. No general solicitation or general advertising is made in connection with the offer to sell or sale of the securities unless it has been permitted by the administrator.
551.202(14)(a)2.
2. No commission or other remuneration is paid or given, directly or indirectly, to a person other than a broker-dealer registered under this chapter or an agent registered under this chapter for soliciting any person in this state other than those persons designated in
sub. (13).
551.202(14)(a)3.
3. The offeror reasonably believes that all the purchasers in this state, other than those designated in
sub. (13), are purchasing for investment.
551.202(14)(b)
(b) The administrator may by rule or order, as to any security or transaction or any type of security or transaction, withdraw or further condition this exemption, or increase or decrease the number of offerees permitted, or waive the conditions in
par. (a), and may require reports of sales under this exemption.
551.202(15)
(15) A transaction under an offer to existing security holders of the issuer, including persons that at the date of the transaction are holders of convertible securities, options, or warrants, if a commission or other remuneration, other than a standby commission, is not paid or given, directly or indirectly, for soliciting a security holder in this state and if, prior to any offer or sale of any security that is not a federal covered security, the issuer files a notice specifying the terms of the offer, all other information that the administrator by rule requires, and any additional information reasonably related to the offering required to be filed by the administrator within 10 days after the filing date of the notice, and the administrator does not by order disallow the exemption within 10 days after the date of filing the notice or, if additional information is required, within 10 days after the date of filing that information.
551.202(16)
(16) An offer to sell, but not a sale, of a security not exempt from registration under the Securities Act of 1933 if all of the following apply:
551.202(16)(a)
(a) A registration or offering statement or similar record as required under the Securities Act of 1933 has been filed, but is not effective, or the offer is made in compliance with Rule 165 adopted under the Securities Act of 1933 (
17 CFR 230.165).
551.202(16)(b)
(b) A stop order of which the offeror is aware has not been issued against the offeror by the administrator or the Securities and Exchange Commission, and an audit, inspection, or proceeding that is public and that may culminate in a stop order is not known by the offeror to be pending.
551.202(17)
(17) An offer to sell, but not a sale, of a security exempt from registration under the Securities Act of 1933 if all of the following apply:
551.202(17)(a)
(a) A registration statement has been filed under this chapter, but is not effective.
551.202(17)(b)
(b) A solicitation of interest is provided in a record to offerees in compliance with a rule adopted by the administrator under this chapter.
551.202(17)(c)
(c) A stop order of which the offeror is aware has not been issued by the administrator under this chapter and an audit, inspection, or proceeding that may culminate in a stop order is not known by the offeror to be pending.
551.202(18)
(18) A transaction involving the distribution of the securities of an issuer to the security holders of another person in connection with a merger, consolidation, exchange of securities, sale of assets, or other reorganization to which the issuer, or its parent or subsidiary and the other person, or its parent or subsidiary, are parties.
551.202(20)
(20) An offer or sale of a security to a person not a resident of this state and not present in this state if the offer or sale does not constitute a violation of the laws of the state or foreign jurisdiction in which the offeree or purchaser is present and is not part of an unlawful plan or scheme to evade this chapter.
551.202(21)
(21) Employees' stock purchase, savings, option, profit-sharing, pension, or similar employees' benefit plan, including any securities, plan interests, and guarantees issued under a compensatory benefit plan or compensation contract, contained in a record, established by the issuer, its parents, its majority-owned subsidiaries, or the majority-owned subsidiaries of the issuer's parent, for the participation of their employees including offers or sales of such securities to all of the following:
551.202(21)(a)
(a) Directors; general partners; trustees, if the issuer is a business trust; officers; consultants; and advisors.
551.202(21)(b)
(b) Family members who acquire such securities from those persons through gifts or domestic relations orders.
551.202(21)(c)
(c) Former employees, directors, general partners, trustees, officers, consultants, and advisors if those individuals were employed by or providing services to the issuer when the securities were offered.
551.202(21)(d)
(d) Insurance agents who are exclusive insurance agents of the issuer, or the issuer's subsidiaries or parents, or who derive more than 50 percent of their annual income from those organizations.
551.202(22)
(22) A transaction involving any of the following:
551.202(22)(a)
(a) A stock dividend or equivalent equity distribution, whether the corporation or other business organization distributing the dividend or equivalent equity distribution is the issuer or not, if nothing of value is given by stockholders or other equity holders for the dividend or equivalent equity distribution other than the surrender of a right to a cash or property dividend if each stockholder or other equity holder may elect to take the dividend or equivalent equity distribution in cash, property, or stock.
551.202(22)(b)
(b) An act incident to a judicially approved reorganization in which a security is issued in exchange for one or more outstanding securities, claims, or property interests, or partly in such exchange and partly for cash.
551.202(22)(c)
(c) The solicitation of tenders of securities by an offeror in a tender offer in compliance with Rule 162 adopted under the Securities Act of 1933 (
17 CFR 230.162).
551.202(23)
(23) A nonissuer transaction in an outstanding security by or through a broker-dealer registered or exempt from registration under this chapter, if the issuer is a reporting issuer in a foreign jurisdiction designated by this subsection or by rule adopted or order issued under this chapter; has been subject to continuous reporting requirements in the foreign jurisdiction for not less than 180 days before the transaction; and the security is listed on the foreign jurisdiction's securities exchange that has been designated by this subsection or by rule adopted or order issued under this chapter, or is a security of the same issuer that is of senior or substantially equal rank to the listed security or is a warrant or right to purchase or subscribe to any of the foregoing. For purposes of this subsection, Canada, together with its provinces and territories, is a designated foreign jurisdiction and The Toronto Stock Exchange, Inc. and the TSX Venture Exchange, Inc. are designated securities exchanges. After an administrative hearing in compliance with
ch. 227, the administrator, by rule adopted or order issued under this chapter, may revoke the designation of a securities exchange under this subsection, if the administrator finds that revocation is necessary or appropriate in the public interest and for the protection of investors.
551.202(24)
(24) Any offer or sale of its securities by an issuer, having its principal office in this state, if the aggregate number of persons holding directly or indirectly all of the issuer's securities, after the securities to be issued are sold, does not exceed 25, exclusive of persons under
sub. (13), if no commission or other remuneration is paid or given directly or indirectly for soliciting any person in this state, except to broker-dealers and agents licensed in this state, and if no advertising is published unless it has been permitted by the division of securities.
551.202(25)
(25) Any offer or sale of a preorganization subscription, if no commission or other remuneration is paid or given directly or indirectly for soliciting any subscriber in this state and no advertising is published or circulated unless it has been permitted by the division of securities, and if the subscription is not binding and no payment is made by any subscriber until the securities subscribed for may legally be sold.
551.202 History
History: 2007 a. 196.
551.202 Annotation
When a certificate of stock was mailed to the plaintiff in Wisconsin, and extensive solicitation was conducted by the defendants in Wisconsin, there was an "offer" within s. 551.02 (11) (b). Since the securities were neither registered in Wisconsin nor exempt from registration, the plaintiff was entitled to rescind the transaction and recover the purchase price of the securities, plus costs. Hardtke v. Love Tree Corp.
386 F. Supp. 1085 (1975).
551.202 Annotation
Registration and reporting requirements for exempt transactions are discussed. Feitler v. Midas Associates,
418 F. Supp. 735 (1976).
551.202 Note
NOTE: The above annotations refer to ch. 551, 2005 stats., repealed by
2007 Wis. Act 196.
551.203
551.203
Additional exemptions and waivers. A rule adopted or order issued under this chapter may exempt a security, transaction, or offer; a rule under this chapter may exempt a class of securities, transactions, or offers from any or all of the requirements of
ss. 551.301 to
551.306 and
551.504; and an order under this chapter may waive, in whole or in part, any or all of the conditions for an exemption or offer under
ss. 551.201 and
551.202.
551.203 History
History: 2007 a. 196.
551.204
551.204
Denial, suspension, revocation, condition, or limitation of exemptions; burden of proof; additional information. 551.204(1)(1)
Enforcement related powers. Except with respect to a federal covered security or a transaction involving a federal covered security, an order under this chapter may deny, suspend application of, condition, limit, or revoke an exemption created under
s. 551.201 or
551.202 or an exemption or waiver created under
s. 551.203 with respect to a specific security, transaction, or offer, except to the extent limited by the National Securities Markets Improvement Act of 1996. An order under this section may be issued only pursuant to the procedures in
s. 551.306 (4) or
s. 551.604 and only prospectively.
551.204(2)
(2) Knowledge of order required. A person does not violate
s. 551.301,
551.303 to
551.306,
551.504, or
551.511 by an offer to sell, offer to purchase, sale, or purchase effected after the entry of an order issued under this section if the person did not know, and in the exercise of reasonable care could not have known, of the order.
551.204(3)
(3) Additional information required. With respect to an exemption under
s. 551.201 or
551.202 that is perfected if a notice or other information is filed with the division of securities and the division does not disallow the exemption within a specified period after the filing, the division may, within 10 days after the filing date of the notice or other information, require that additional information reasonably related to the offering be filed. If the division requires additional information, the date by which the division may disallow the exemption is 10 days after the date of filing that information.
551.204 History
History: 2007 a. 196.
REGISTRATION OF SECURITIES AND NOTICE FILING OF FEDERAL COVERED SECURITIES
551.301
551.301
Securities registration requirement. It is unlawful for a person to offer or sell a security in this state unless any of the following apply:
551.301(1)
(1) The security is a federal covered security.
551.301(2)
(2) The security, transaction, or offer is exempted from registration under this chapter.
551.301(3)
(3) The security is registered under this chapter.
551.301 History
History: 2007 a. 196.
551.301 Annotation
Sub. (1) is violated through an offer to sell an unregistered security, even if no sale occurs. State v. Johnson, 2002 WI App 224,
257 Wis. 2d 736,
652 N.W.2d 642,
01-1092.
551.301 Annotation
When a certificate of stock was mailed to the plaintiff in Wisconsin, and extensive solicitation was conducted by the defendants in Wisconsin, there was an "offer" within s. 551.02. (11) (b). Since the securities were neither registered in Wisconsin nor exempt from registration, the plaintiff was entitled to rescind the transaction and recover the purchase price of the securities, plus costs. Hardtke v. Love Tree Corp.
386 F. Supp. 1085 (1975).
551.301 Annotation
Registration and reporting requirements for exempt transactions are discussed. Feitler v. Midas Associates,
418 F. Supp. 735 (1976).
551.301 Note
NOTE: The above annotations refer to ch. 551, 2005 stats., repealed by
2007 Wis. Act 196.
551.302(1)(1)
Required filing of records. With respect to a federal covered security, as defined in section 18 (b) (2) of the Securities Act of 1933 (
15 USC 77r (b) (2), that is not otherwise exempt under
ss. 551.201 to
551.203, a rule adopted by the administrator or an order issued under this chapter may require the filing of any or all of the following records:
551.302(1)(a)
(a)
Prior to offer. 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 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 administrator 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. 551.614. Any notice filing required under this paragraph is effective upon receipt by the administrator 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.
551.302(1)(b)
(b)
After offer. After the initial offer of the federal covered security in this state, a copy of each document that is part of an amendment to its registration statement filed with the 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 administrator 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 administrator of the documents and fees required under this paragraph.
551.302(1)(c)
(c)
Unit trust or investment company. 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.
551.302(3)
(3) Notice filings for certain federal covered securities. With respect to a security that is a federal covered security under section 18 (b) (4) (D) of the Securities Act of 1933 (
15 USC 77r (b) (4) (D)), a rule under this chapter may require a notice filing by or on behalf of an issuer to include a copy of Form D, including the Appendix, as promulgated by the Securities and Exchange Commission, and a consent to service of process complying with
s. 551.611 signed by the issuer not later than 15 days after the first sale of the federal covered security in this state and the payment of a fee as provided in
s. 551.614 or by rule of the administrator; and the payment of a fee as provided in
s. 551.614 or by rule of the administrator for any late filing.
551.302(4)
(4) Stop orders. Except with respect to a federal covered security under section 18 (b) (1) of the Securities Act of 1933 (
15 USC 77r (b) (1)), if the administrator finds that there is a failure to comply with a notice or fee requirement of this section, the administrator may issue a stop order suspending the offer and sale of a federal covered security in this state. If the deficiency is corrected, the stop order is void as of the time of its issuance and no penalty may be imposed by the administrator.
551.302(5)
(5) Waiver. The administrator may, by rule or order, waive or further condition any waiver of a requirement under this section or under any rule promulgated by the administrator, or order issued, under this section.
551.302 History
History: 2007 a. 196.
551.303
551.303
Securities registration by coordination. 551.303(1)(1)
Registration permitted. A security for which a registration statement has been filed under the Securities Act of 1933 in connection with the same offering may be registered by coordination under this section.
551.303(2)
(2) Required records. A registration statement and accompanying records under this section must contain or be accompanied by all of the following records in addition to the information specified in
s. 551.305 and a consent to service of process complying with
s. 551.611:
551.303(2)(a)
(a) A copy of the latest form of prospectus filed under the Securities Act of 1933.
551.303(2)(b)
(b) A copy of the articles of incorporation and bylaws or their substantial equivalents currently in effect; a copy of any agreement with or among underwriters; a copy of any indenture or other instrument governing the issuance of the security to be registered; and a specimen, copy, or description of the security that is required by rule adopted or order issued under this chapter.
551.303(2)(c)
(c) Copies of any other information or any other records filed by the issuer under the Securities Act of 1933 requested by the administrator.
551.303(2)(d)
(d) An undertaking to forward each amendment to the federal prospectus, other than an amendment that delays the effective date of the registration statement, promptly after it is filed with the Securities and Exchange Commission.
551.303(3)
(3) Conditions for effectiveness of registration statement. A registration statement under this section becomes effective simultaneously with or subsequent to the federal registration statement when all the following conditions are satisfied:
551.303(3)(a)
(a) A stop order under
sub. (4) or
s. 551.306 or issued by the Securities and Exchange Commission is not in effect and a proceeding is not pending against the issuer under
s. 551.306.
551.303(3)(b)
(b) The registration statement has been on file for at least 20 days or a shorter period provided by rule adopted or order issued under this chapter.
551.303(4)
(4) Notice of federal registration statement effectiveness. The registrant shall promptly notify the administrator in a record of the date when the federal registration statement becomes effective and the content of any price amendment and shall promptly file a record containing the price amendment. If the notice is not timely received, the administrator may issue a stop order, without prior notice or hearing, retroactively denying effectiveness to the registration statement or suspending its effectiveness until compliance with this section. The administrator shall promptly notify the registrant of an order by telecopy, telephone, or electronic means and promptly confirm this notice by a record. If the registrant subsequently complies with the notice requirements of this section, the stop order is void as of the date of its issuance.
551.303(5)
(5) Effectiveness of registration statement. If the federal registration statement becomes effective before each of the conditions in this section is satisfied or is waived by the administrator, the registration statement is automatically effective under this chapter when all the conditions are satisfied or waived. If the registrant notifies the administrator of the date when the federal registration statement is expected to become effective, the administrator shall promptly notify the registrant by telecopy, telephone, or electronic means and promptly confirm this notice by a record, indicating whether all the conditions are satisfied or waived and whether the administrator intends the institution of a proceeding under
s. 551.306. The notice by the administrator does not preclude the institution of such a proceeding.
