551.402(2)(g)
(g) An individual who represents an issuer in connection with the purchase of the issuer's own securities.
551.402(2)(h)
(h) An individual who represents an issuer or broker-dealer and who restricts participation to performing clerical or ministerial acts.
551.402(2)(hm)
(hm) An individual who represents a broker-dealer and effects transactions in this state exclusively with customers listed under
s. 551.401 (2) (a) to
(d) and
(h).
551.402(2)(i)
(i) Any other individual exempted by rule adopted or order issued under this chapter.
551.402(3)
(3) Registration effective only while employed or associated. The registration of an agent is effective only while the agent is employed by or associated with a broker-dealer registered under this chapter or an issuer that is offering, selling, or purchasing its securities in this state.
551.402(4)
(4) Limit on employment or association. It is unlawful for a broker-dealer, or an issuer engaged in offering, selling, or purchasing securities in this state, to employ or associate with an agent who transacts business in this state on behalf of broker-dealers or issuers unless the agent is registered under
sub. (1) for the broker-dealer or issuer or exempt from registration under
sub. (2).
551.402(5)
(5) Limit on affiliations. Except as permitted under
sub. (6), an individual may not act as an agent for more than one broker-dealer or one issuer at a time, unless the broker-dealers or the issuers for which the agent acts are affiliated by direct or indirect common control or are authorized by rule or order under this chapter.
551.402(6)
(6) Dual representation. 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 registration for each limited partnership or investment company represented by the agent if all of the following conditions are satisfied:
551.402(6)(a)
(a) The limited partnerships have the same general partner or the investment companies have the same investment adviser.
551.402(6)(b)
(b) An application to amend the agent's registration to name each limited partnership or investment company as the agent's employer is filed with and approved by the administrator before the agent makes any offer or sale in the state on behalf of the additional limited partnership or investment company.
551.402 History
History: 2007 a. 196.
551.403
551.403
Investment adviser registration requirement and exemptions. 551.403(1)(1)
Registration requirement. It is unlawful for a person to transact business in this state as an investment adviser unless the person is registered under this chapter as an investment adviser or is exempt from registration as an investment adviser under
sub. (2).
551.403(2)
(2) Exemptions from registration. The following persons are exempt from the registration requirement of
sub. (1):
551.403(2)(a)1.
1. Federal covered investment advisers, investment advisers registered under this chapter, or broker-dealers registered under this chapter.
551.403(2)(a)2m.
2m. Accredited investors as defined in Rule 501 (a) (1), (2), (3), (7) or (8) adopted under the Securities Act of 1933.
551.403(2)(a)3.
3. Bona fide preexisting clients whose principal places of residence are not in this state if the investment adviser is registered or exempt from registration under the securities act of the state in which the clients maintain principal places of residence.
551.403(2)(a)4.
4. Any other client exempted by rule adopted or order issued under this chapter.
551.403(2)(b)
(b) A person without a place of business in this state if the person has had, during the preceding 12 months, not more than 5 clients that are resident in this state in addition to those specified under
par. (a).
551.403(2)(c)
(c) Any other person exempted by rule adopted or order issued under this chapter.
551.403(3)
(3) Limits on employment or association. It is unlawful for an investment adviser, directly or indirectly, to employ or associate with an individual to engage in an activity related to investment advice in this state if the registration of the individual is denied or suspended or revoked or the individual is barred from employment or association with an investment adviser, federal covered investment adviser, or broker-dealer by an order under this chapter, the Securities and Exchange Commission, or a self-regulatory organization, unless the investment adviser did not know, and in the exercise of reasonable care could not have known, of the denial, suspension, revocation, or bar. Upon request from the investment adviser and for good cause, the administrator, by order, may waive, in whole or in part, the application of the prohibitions of this subsection to the investment adviser.
551.403(4)
(4) Investment adviser representative registration required. It is unlawful for an investment adviser to employ or associate with an individual required to be registered under this chapter as an investment adviser representative who transacts business in this state on behalf of the investment adviser unless the individual is registered under
s. 551.404 (1) or is exempt from registration under
s. 551.404 (2).
551.403 History
History: 2007 a. 196.
551.403 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. Supp. 796 (1992).
551.403 Note
NOTE: The above annotation refers to ch. 551, 2005 stats., repealed by
2007 Wis. Act 196.
551.404
551.404
Investment adviser representative registration requirement and exemptions. 551.404(1)
(1)
Registration requirement. It is unlawful for an individual to transact business in this state as an investment adviser representative unless the individual is registered under this chapter as an investment adviser representative or is exempt from registration as an investment adviser representative under
sub. (2).
551.404(2)
(2) Exemptions from registration. The following individuals are exempt from the registration requirement of
sub. (1):
551.404(2)(a)
(a) An individual who is employed by or associated with an investment adviser that is exempt from registration under
s. 551.403 (2) or a federal covered investment adviser that is excluded from the notice filing requirements of
s. 551.405.
551.404(2)(am)
(am) An individual who is employed by or associated with an investment adviser or a federal covered investment adviser and whose clients in the state are exclusively those clients listed in
s. 551.403 (2) (a) 1. to
2m. and
4.
551.404(2)(b)
(b) Any other individual exempted by rule adopted or order issued under this chapter.
551.404(3)
(3) Registration effective only while employed or associated. The registration of an investment adviser representative is effective only while the investment adviser representative is employed by or associated with an investment adviser registered under this chapter or a federal covered investment adviser that has made or is required to make a notice filing under
s. 551.405.
551.404(4)
(4) Limit on affiliations. An individual may transact business as an investment adviser representative for more than one investment adviser or federal covered investment adviser unless a rule adopted or order issued under this chapter prohibits or limits an individual from acting as an investment adviser representative for more than one investment adviser or federal covered investment adviser.
551.404(5)
(5) Limits on employment or association. It is unlawful for an individual acting as an investment adviser representative, directly or indirectly, to conduct business in this state on behalf of an investment adviser or a federal covered investment adviser if the registration of the individual as an investment adviser representative is suspended or revoked or the individual is barred from employment or association with an investment adviser or a federal covered investment adviser by an order under this chapter, the Securities and Exchange Commission, or a self-regulatory organization. Upon request and for good cause, the administrator, by order issued, may waive, in whole or in part, the application of the requirements of this subsection.
551.404(6)
(6) Referral fees. An investment adviser registered or exempt from registration under this chapter, a federal covered investment adviser that has filed a notice under
s. 551.405 or is exempt from such notice filing requirement, or a broker-dealer registered or exempt from registration under this chapter is not required to employ or associate with an individual as an investment adviser representative if the only compensation paid to the individual for a referral of investment advisory clients is paid to an investment adviser registered or exempt from registration under this chapter, a federal covered investment adviser that has filed a notice or is exempt from filing a notice under
s. 551.405, or a broker-dealer registered or exempt from registration under this chapter with which the individual is employed or associated as an investment adviser representative.
551.404 History
History: 2007 a. 196.
551.405
551.405
Federal covered investment adviser notice filing requirement. 551.405(1)(1)
Notice filing requirement. Except with respect to a federal covered investment adviser described in
sub. (2), it is unlawful for a federal covered investment adviser to transact business in this state as a federal covered investment adviser unless the federal covered investment adviser complies with
sub. (3).
551.405(2)
(2) Notice filing requirement not required. The following federal covered investment advisers are not required to comply with
sub. (3):
551.405(2)(a)
(a) A federal covered investment adviser without a place of business in this state if its only clients in this state are:
551.405(2)(a)1.
1. Federal covered investment advisers, investment advisers registered under this chapter, and broker-dealers registered under this chapter.
551.405(2)(a)2m.
2m. Accredited investors as defined and listed in
17 CFR 230.501 (a) (1), (2), (3), (7), or (8) under Regulation D under the Securities Act of 1933.
551.405(2)(a)3.
3. Bona fide preexisting clients whose principal places of residence are not in this state.
551.405(2)(a)4.
4. Other clients specified by rule adopted or order issued under this chapter.
551.405(2)(b)
(b) A federal covered investment adviser without a place of business in this state if the person has had, during the preceding 12 months, not more than 5 clients that are resident in this state in addition to those specified under
par. (a).
551.405(2)(c)
(c) Any other person excluded by rule adopted or order issued under this chapter.
551.405(3)
(3) Notice filing procedure. A person acting as a federal covered investment adviser, not excluded under
sub. (2), shall file a notice, a consent to service of process complying with
s. 551.611, and such records as have been filed with the Securities and Exchange Commission under the Investment Advisers Act of 1940 required by rule adopted or order issued under this chapter and pay the fees specified in
s. 551.614 (2).
551.405(4)
(4) Effectiveness of filing. The notice under
sub. (3) becomes effective upon its filing and expires on December 31 unless any of the following occurs:
551.405(4)(b)
(b) The notice filing is limited or extended for not more than 6 months and the notice filer pays a fee, adjusted proportionately by the administrator by rule or order.
551.405(4)(c)
(c) The administrator specifies a different expiration date by rule or order.
551.405 History
History: 2007 a. 196.
551.406
551.406
Registration by broker-dealer, agent, investment adviser, and investment adviser representative. 551.406(1)(1)
Application for initial registration. A person shall register as a broker-dealer, agent, investment adviser, or investment adviser representative by filing with the administrator, or an organization which the administrator by rule designates, an application and a consent to service of process complying with
s. 551.611, and paying the fee specified in
s. 551.614 and any reasonable fees charged by the designee of the administrator for processing the filing. The application must contain all of the following:
551.406(1)(a)
(a) The information or record required for the filing of a uniform application.
551.406(1)(b)
(b) Upon request by the administrator, any other financial or other information or record that the administrator determines is appropriate.
551.406(2)
(2) Amendment. If the information or record contained in an application filed under
sub. (1) is or becomes inaccurate or incomplete in a material respect, the registrant shall promptly file a correcting amendment.
551.406(3)(a)(a) If an order is not in effect and a proceeding is not pending under
s. 551.412, registration is effective 30 days from the filing of the application or at the earliest of the following times prior to the expiration of 30 days from the filing of the application, whichever is earlier, unless the registration is denied:
551.406(3)(a)1.
1. The date that the administrator issues registration to the applicant.
551.406(3)(a)2.
2. The date that approval of registration status is transmitted by the administrator to the applicant through the central registration depository of the National Association of Securities Dealers, Inc.
551.406(3)(a)3.
3. On January 1 for any renewal application filed during December of the preceding year with the central registration depository, unless the administrator makes a written request for additional information relevant to the application prior to January 1.
551.406(3)(b)
(b) A rule adopted or order issued under this chapter may set an earlier effective date or may defer the effective date until noon on the 45th day after the filing of any amendment completing the application.
551.406(4)
(4) Registration renewal. A registration is effective until midnight on December 31 of the year for which the application for registration is filed. Unless an order is in effect under
s. 551.412, a registration may be automatically renewed each year by filing such records as are required by rule adopted or order issued under this chapter, by paying the fee specified in
s. 551.614, and by paying costs charged by the designee of the administrator for processing the filings.
551.406(5)
(5) Additional conditions or waivers. A rule adopted or order issued under this chapter may impose other conditions, not inconsistent with the National Securities Markets Improvement Act of 1996. An order issued under this chapter may waive, in whole or in part, specific requirements in connection with registration as are in the public interest and for the protection of investors.
551.406(6)(a)(a) In addition to the information required elsewhere under this section, an application for registration shall contain, in the case of an individual, the individual's social security number and, in the case of a person who is not an individual, the person's federal employer identification number. The administrator may not disclose any information received under this paragraph to any person except the following:
551.406(6)(a)1.
1. The department of revenue, for the sole purpose of requesting certifications under
s. 73.0301.
551.406(6)(a)2.
2. The department of children and families in accordance with a memorandum of understanding under
s. 49.857.
551.406(6)(b)
(b) If an applicant for the issuance or renewal of a registration under this section is an individual who does not have a social security number, the applicant, as a condition of applying for or applying to renew the registration, shall submit a statement made or subscribed under oath or affirmation to the administrator that the applicant does not have a social security number. The form of the statement shall be prescribed by the department of children and families.
551.406(6)(c)
(c) Any license issued or renewed in reliance upon a false statement submitted by an applicant under
par. (a) or
(b) is invalid.
551.406 History
History: 2007 a. 196.
551.407
551.407
Succession and change in registration of broker-dealer or investment adviser. 551.407(1)
(1)
Succession. A broker-dealer or investment adviser may succeed to the current registration of another broker-dealer or investment adviser or a notice filing of a federal covered investment adviser, and a federal covered investment adviser may succeed to the current registration of an investment adviser or notice filing of another federal covered investment adviser, by filing as a successor an application for registration pursuant to
s. 551.401 or
551.403 or a notice pursuant to
s. 551.405 for the unexpired portion of the current registration or notice filing.
551.407(2)
(2) Organizational change. A broker-dealer or investment adviser that changes its form of organization or state of incorporation or organization may continue its registration by filing an amendment to its registration if the change does not involve a change in control. The amendment becomes effective when filed or on a date designated by the registrant in its filing. The new organization is a successor to the original registrant for the purposes of this chapter. If there is a change in control, the broker-dealer or investment adviser shall file a new application for registration. A predecessor registered under this chapter shall stop conducting its securities business other than winding down transactions and shall file for withdrawal of broker-dealer or investment adviser registration within 45 days after filing its amendment to effect succession.
551.407(3)
(3) Name change. A broker-dealer or investment adviser that changes its name may continue its registration by filing an amendment to its registration. The amendment becomes effective when filed or on a date designated by the registrant.
551.407(4)
(4) Change of control. A change of control of a broker-dealer or investment adviser may be made in accordance with a rule adopted or order issued under this chapter.
551.407 History
History: 2007 a. 196.
551.408
551.408
Termination of employment or association of agent and investment adviser representative and transfer of employment or association. 551.408(1)
(1)
Notice of termination. If an agent registered under this chapter terminates employment by or association with a broker-dealer or issuer, or if an investment adviser representative registered under this chapter terminates employment by or association with an investment adviser or federal covered investment adviser, or if either registrant terminates activities that require registration as an agent or investment adviser representative, the broker-dealer, issuer, investment adviser, or federal covered investment adviser shall promptly file a notice of termination. If the registrant learns that the broker-dealer, issuer, investment adviser, or federal covered investment adviser has not filed the notice, the registrant may do so.
551.408(2)
(2) Transfer of employment or association. If an agent registered under this chapter terminates employment by or association with a broker-dealer registered under this chapter and begins employment by or association with another broker-dealer registered under this chapter; or if an investment adviser representative registered under this chapter terminates employment by or association with an investment adviser registered under this chapter or a federal covered investment adviser that has filed a notice under
s. 551.405 and begins employment by or association with another investment adviser registered under this chapter or a federal covered investment adviser that has filed a notice under
s. 551.405; then upon the filing by or on behalf of the registrant, within 30 days after the termination, of an application for registration that complies with the requirement of
s. 551.406 (1) and payment of the filing fee required under
s. 551.614, the registration of the agent or investment adviser representative is:
551.408(2)(a)
(a) Immediately effective as of the date of the completed filing, if the agent's Central Registration Depository record or successor record or the investment adviser representative's Investment Adviser Registration Depository record or successor record does not contain a new or amended disciplinary disclosure within the previous 12 months.
551.408(2)(b)
(b) Temporarily effective as of the date of the completed filing, if the agent's Central Registration Depository record or successor record or the investment adviser representative's Investment Adviser Registration Depository record or successor record contains a new or amended disciplinary disclosure within the preceding 12 months.
551.408(3)
(3) Withdrawal of temporary registration. The administrator may withdraw a temporary registration if there are or were grounds for discipline as specified in
s. 551.412 and the administrator does so within 30 days after the filing of the application. If the administrator does not withdraw the temporary registration within the 30-day period, registration becomes automatically effective on the 31st day after filing.
551.408(4)
(4) Power to prevent registration. The administrator may prevent the effectiveness of a transfer of an agent or investment adviser representative under
sub. (2) (a) or
(b) based on the public interest and the protection of investors.
551.408(5)
(5) Termination of registration or application for registration. If the administrator determines that a registrant or applicant for registration is no longer in existence or has ceased to act as a broker-dealer, agent, investment adviser, or investment adviser representative, or is the subject of an adjudication of incapacity or is subject to the control of a committee, conservator, or guardian, or cannot reasonably be located, a rule adopted or order issued under this chapter may require the registration be canceled or terminated or the application denied. The administrator may reinstate a canceled or terminated registration, with or without hearing, and may make the registration retroactive.
