Chapter DFI-Sec 7

DFI-Sec 7.02(1)(a) (a) Any sales literature, pamphlet, form letter or other advertising record, other than a prospectus, to be used in an offering for which a registration statement has been filed under s. 551.303 or 551.304, Stats.

DFI-Sec 7.02(1)(b) (b) Any sales literature, pamphlet, form letter or other advertising record, other than a prospectus or offering circular, to be used in an offering for which a notice filing has been made for purposes of use of the registration exemption in s. 551.201 (7), Stats., and rules thereunder.

DFI-Sec 7.02(1)(c) (c) A circular, form letter, or other advertising record to be used in connection with a going-private transaction that is subject to the filing requirement in s. DFI-Sec 6.05 (1) (b).

DFI-Sec 7.02(2) (2) Advertising filed under sub. (1) shall include any fee applicable under s. DFI-Sec 7.01 (4).

DFI-Sec 7.02 History History: Cr. Register, December, 1969, No. 168, eff. 1-1-70; am. (1) (a) and (b), Register, August, 1972, No. 200, eff. 9-1-72; emerg. am. (1) (b) and (e), eff. 11-4-75; am (1) (b), and (e), Register, February, 1976, No. 242, eff. 3-1-76; am. Register, December, 1977, No. 264, eff. 1-1-78; am. (1) (b), Register, September, 1978, No. 273, eff. 10-1-78; am. (1) (a), Register, December, 1980, No. 300, eff. 1-1-81; am. (2), Register, December, 1981, No. 312, eff. 1-1-82; am. (1) (d), Register, December, 1983. No. 336, eff. 1-1-84; am. (1) (b), Register, March, 1986, No. 363, eff. 4-1-86; am. (1) (a), Register, December, 1990, No. 420, eff. 1-1-91; am. (1) (b), Register, December, 1992, No. 444, eff. 1-1-93; am. (1) (b), Register, December, 2000, No. 540, eff. 1-1-01; CR 01-083: am. (1) (b), Register December 2001 No. 552, eff. 1-1-02; CR 08-077: r. and recr. Register December 2008 No. 636, eff. 1-1-09.

DFI-Sec 7.03 DFI-Sec 7.03 Civil liabilities.

DFI-Sec 7.03(1) (1) For purposes of s. 551.509 (2) and (3), Stats., any person who places an order or effects a transaction involving the purchase or sale of a security for the account of a customer pursuant to discretionary authority is deemed to be offering or selling or purchasing a security.

DFI-Sec 7.03(3) (3) Every rescission offer made pursuant to s. 551.511 (1), Stats., shall include, in addition to the information specified in that subsection, the price at which the security was sold or purchased, the price of the security on the date the offer is made and such additional information as the division may require in connection with specific offers.

DFI-Sec 7.03(4) (4) The division may require any person named in any administrative order issued under s. 551.604, Stats., to satisfy any civil liabilities arising under s. 551.509, Stats., in connection with the matters set forth in the order, prior to registering any securities offered for sale by the person or registering the person as a broker-dealer, agent, investment adviser or investment adviser representative.

DFI-Sec 7.03 History History: Cr. Register, December, 1969, No. 168, eff. 1-1-70; cr. (4), Register, August, 1972, No. 200, eff. 9-1-72; renum. to be 7.03, Register, December, 1977, No. 264, eff. 1-1-78; am. (2) to (4), Register, December, 1980, No. 300, eff. 1-1-81, am. (2), Register, December, 1983, No. 336, eff. 1-1-84; CR 08-077: am. (1), (3) and (4), r. (2) Register December 2008 No. 636, eff. 1-1-09.

DFI-Sec 7.04 DFI-Sec 7.04 Annual reports. Unless otherwise required by rule or order of the division, every issuer whose securities have been registered under ch. 551, Stats., or any predecessor law and are held of record by 100 or more persons in this state, but none of whose securities are registered under section 12 of the securities exchange act of 1934 or exempted from registration by section 12 (g) (2) (B) or (G) thereof, shall distribute to the security holders not more than 120 days after the end of each fiscal year of the issuer a balance sheet of the issuer as of the end of such fiscal year and statements of income and changes in financial position and an analysis of surplus for the fiscal year meeting the requirements of s. DFI-Sec 7.06, and shall concurrently file copies of those financial statements with the division.

DFI-Sec 7.04 History History: Cr. Register, December, 1969, No. 168, eff. 1-1-70; renum. to 7.04 and am. Register, December, 1977, No. 264, eff. 1-1-78.

DFI-Sec 7.05 DFI-Sec 7.05 Files and records.

DFI-Sec 7.05(1) (1) Except as otherwise provided by law or as specified in sub. (2), any record or document in the division’s possession or control of which the division is the legal custodian, may be inspected or copied by any person during regular business hours.

DFI-Sec 7.05(2) (2) The following records may be excluded from disclosure under this section if the division finds the public interest in nondisclosure outweighs the benefits of open access:

DFI-Sec 7.05(2)(a) (a) Personnel files of office employees, former employees and job applicants;

DFI-Sec 7.05(2)(b) (b) Communications with legal counsel;

DFI-Sec 7.05(2)(c) (c) Records obtained under a pledge or reasonable expectation of confidentiality;

DFI-Sec 7.05(2)(d) (d) Memoranda and work papers of employees, the division or the deputy division prepared with the reasonable expectation of confidentiality.

DFI-Sec 7.05(2)(e) (e) A record that is a part of a current investigation that may result in administrative, legal or criminal action, or that relates to any such pending action.

DFI-Sec 7.05(2)(f) (f) A record whose disclosure would unduly damage a person’s reputation so as to outweigh the public interest in disclosure.

DFI-Sec 7.05(3) (3) With respect to records described in sub. (2) (c) the division shall, and with respect to any other records the division may, prior to producing the records for inspection or copying, call a hearing (with notice to interested persons) for the purpose of determining whether the records should be produced.

DFI-Sec 7.05(4) (4) A request for records shall be addressed to the division, who shall produce the records or a written refusal with specific reasons therefor within 10 business days after the request is received (except records described in sub. (2) (c) as to which a hearing has been called).

DFI-Sec 7.05 History History: Cr. Register, December, 1969, No. 168, eff. 1-1-70; renum. from SEC 6.06 and r. and recr. Register, December, 1977, No. 264, eff. 1-1-78; cr. (2) (e) and (f), Register, December, 1988, No. 396, eff. 1-1-89.

DFI-Sec 7.06 DFI-Sec 7.06 Financial statements.

DFI-Sec 7.06(1) (1) All financial statements required by ch. 551, Stats., or these rules shall be:

DFI-Sec 7.06(1)(a) (a) Prepared in accordance with generally accepted accounting principles; and

DFI-Sec 7.06(1)(b) (b) Examined and reported upon by an independent certified public accountant, provided that this requirement may be waived by the division and does not apply to interim financial statements unless otherwise required by the division in particular cases. The accountant’s report shall meet the requirements of rule 2-02 of regulation S-X of the U.S. securities and exchange commission and shall accompany the financial statements included in the prospectus.

DFI-Sec 7.06(2) (2) Financial statements meeting the requirements of regulation S-X are deemed to satisfy the requirements of sub. (1).

DFI-Sec 7.06(3) (3) The division may permit the omission of one or more of the statements required under this section or the filing in substitution therefor of appropriate statements of comparable character. The division may also require the filing of other statements when necessary or appropriate for an adequate presentation of the financial condition of any issuer or person whose financial statements are required, or whose statements are otherwise necessary for the protection of investors.

DFI-Sec 7.06(4) (4) 

DFI-Sec 7.06(4)(a) (a) Financial statements and financial information that have been prepared in accordance with Canadian generally accepted accounting principles, consistently applied, may be contained in a registration statement that has been filed with the division under s. 551.303 or 551.304, Stats., on U.S. securities and exchange commission Form F-7, F-8, F-9 or F-10 and that complies with the following conditions applicable to the type of form being used for the offering:

DFI-Sec 7.06(4)(a)1. 1. The securities that are the subject of a registration statement designated as Form F-7 by the U.S. securities and exchange commission are offered for cash upon the exercise of rights granted to existing security holders.

DFI-Sec 7.06(4)(a)2. 2. The securities that are the subject of a registration statement designated as Form F-8 by the U.S. securities and exchange commission are securities to be issued in an exchange offer, merger or other business combination.

DFI-Sec 7.06(4)(a)3. 3. The securities that are the subject of the registration statement designated as Form F-9 by the U.S. securities and exchange commission are either non-convertible preferred stock or non-convertible debt that are to be rated in one of the four highest rating categories by one or more nationally recognized statistical rating organizations.

DFI-Sec 7.06(4)(a)4. 4. The securities that are the subject of a registration statement designated as Form F-10 by the U.S. securities and exchange commission are offered and sold pursuant to a prospectus in which the U.S. securities and exchange commission has not required a reconciliation to United States generally accepted accounting principles with respect to the financial information presented.

DFI-Sec 7.06(4)(b) (b) For purposes of this subsection, preferred stock and debt securities that are not convertible for at least one year from the date of effectiveness of the registration statement will be deemed to meet the requirement of par. (a) 3.

DFI-Sec 7.06 History History: Cr. Register, December, 1969, No. 168, eff. 1-1-70; cr. (3), Register, August, 1972, No. 200, eff. 9-1-72; renum. from SEC 6.07 and am. Register, December, 1977, No. 264, eff. 1-1-78; am. (1) (b) and (3), Register, December, 1980, No. 300, eff. 1-1-81; emerg. am. (1) (b), cr. (1) (c), eff. 1-1-82; am. (1) (b), Register, December, 1990, No. 420, eff. 1-1-91; cr. (4), Register, December, 1991, No. 432, eff. 1-1-92; am. (2), Register, December, 1995, No. 480, eff. 1-1-96; am. (2), Register, December, 1996, No. 492, eff. 1-1-97; am. (1) (b), Register, December, 1999, No. 528, eff. 1-1-00; CR 08-077: am. (4) (a) (intro.) Register December 2008 No. 636, eff. 1-1-09.