Chapter 25

25.17(71)(a)5. 5. The overall experience of the venture capital investment firms in making investments in businesses that are in the venture capital stage.

25.17(71)(a)6. 6. The relationships that the venture capital investment firms have with technology transfer organizations, such as the Wisconsin Alumni Research Foundation, Inc.

25.17(71)(a)7. 7. The ability of the venture capital investment firms to do lead and follow-on investments.

25.17(71)(b) (b) Nothing in this subsection limits the authority of the board to make any other investments that are otherwise authorized by law or restricts the authority of the board or any venture capital investment firm to make investments in any area of this state.

25.17(72) (72) Appoint the board’s representatives to the committee under s. 16.295 (3) (a).

25.17 History History: 1971 c. 41 s. 12; 1971 c. 74; 1971 c. 100 s. 23; 1971 c. 125 s. 522 (1); 1971 c. 164; 1971 c. 214 s. 147; 1971 c. 260 s. 92 (3) to (5); 1973 c. 117, 137, 151; 1973 c. 208 s. 17; 1973 c. 209, 333, 336; 1975 c. 26, 27, 39, 118, 147, 164, 180, 189, 200, 422; 1977 c. 29 ss. 439 to 439f, 1654 (1); 1977 c. 31, 107, 377, 418, 423; 1979 c. 32; 1979 c. 34 ss. 705 to 707b, 2102 (56) (a); 1979 c. 102; 1979 c. 109 s. 16; 1979 c. 221; 1979 c. 318 ss. 1 to 3; 1979 c. 361 s. 113; 1981 c. 20, 86; 1981 c. 96 ss. 18 to 21, 67; 1981 c. 169, 386; 1983 a. 27; 1983 a. 36 ss. 31, 96 (4); 1983 a. 81 s. 11; 1983 a. 83 s. 20; 1983 a. 142, 189, 192, 368, 410; 1985 a. 25, 29, 53, 120; 1985 a. 332 s. 251 (1); 1987 a. 27, 38, 119, 186, 252, 399; 1989 a. 13, 31, 64, 187, 307, 335, 359, 366; 1991 a. 32, 38, 39, 152, 174, 221, 269, 315; 1993 a. 16, 112, 263, 477; 1995 a. 27 ss. 1394m to 1396, 9116 (5); 1995 a. 56, 213, 227, 274, 403; 1997 a. 27, 35, 191; 1999 a. 9, 11, 63, 65, 83, 167, 196; 2001 a. 7, 13, 16, 92, 104, 109; 2003 a. 33, 35, 48, 91, 111, 299; 2005 a. 1, 22, 25, 74, 153, 172, 335, 441, 478; 2007 a. 20, 97, 125, 155, 170, 212, 226; 2009 a. 2, 28, 89, 190; 2011 a. 32, 166, 198, 257; 2013 a. 20; 2013 a. 36 s. 236m; 2013 a. 41; 2015 a. 55; 2015 a. 197 s. 51; 2015 a. 334 ss. 97, 100; 2017 a. 59; 2019 a. 9, 110; 2021 a. 177, 228, 239; 2021 a. 240 s. 30; 2023 a. 12, 19, 40.

25.17 Annotation The State of Wisconsin Investment Board is an independent going concern not protected by sovereign immunity. Bahr v. SWIB, 186 Wis. 2d 379, 521 N.W.2d 152 (Ct. App. 1994).

25.17 Annotation The commingling of common stocks of various employee trust funds is not prohibited by sub. (3) (f). 59 Atty. Gen. 149.

25.17 Annotation The investment board has authority, under sub. (8), to contribute to a private improvement association for street improvements, if the improvements will directly benefit the board’s property. 65 Atty. Gen. 85.

25.17 Annotation The State of Wisconsin Investment Board (SWIB) has the power to make investments that meet the standard of prudence under s. 25.15 (2), even if those investments are not specifically listed in this chapter. Prior to making investments other than the types enumerated in this chapter, SWIB is not required to make a threshold finding that investing solely in the “legal list” would not meet the standard of prudence. The statutory standard for prudence remains the same whether SWIB is investing in an enumerated investment, or one that is not enumerated. Because the standard of prudence, however, takes into account the trustees’ powers to manage the funds, SWIB’s expanded powers are a relevant factor in evaluating whether SWIB has met that standard. OAG 11-08.

25.17 Annotation The State of Wisconsin Investment Board (SWIB) has the statutory authority to issue debt as part of its broad management authority over the core retirement investment trust fund, provided that SWIB satisfies the prudent person and other standards listed in s. 25.15 (2). The statutory standards apply the same way to issuing debt as a management tool as they apply to any other strategy. OAG 2-22.

25.18 25.18 Additional powers of board.

25.18(1) (1) In addition to the powers and duties enumerated in s. 25.17, but subject to s. 25.183, and notwithstanding any other statute except s. 25.183, the board may:

25.18(1)(a) (a) Employ legal or investment counsel in any matters arising out of the scope of its investment authority or operations. Any expense of counsel so employed shall be borne by the fund for which the services shall be furnished.

25.18 Note NOTE: Par. (a) is shown as amended by 2021 Wis. Acts 177 and 267 and as merged by the legislative reference bureau under s. 13.92 (2) (i).

25.18(1)(b) (b) Execute instruments in which it agrees to indemnify against its failure to endorse payments of any kind which may be made upon notes, bonds, debentures or other securities or to indemnify the issuer of securities, whether it be the obligor thereon or a trustee or agent, against any loss which might be incurred as the result of the issuance or reissuance of securities to replace securities which have been lost, stolen, mutilated or destroyed.

25.18(1)(c) (c) Secure insurance against burglary, robbery, theft or any other risks relating to any of the securities, properties or other investments owned or held by the board or any of the funds or trusts under its management. The board shall pay the costs of such insurance from the current income of the funds or trusts benefiting from the insurance.

25.18(1)(d) (d) Liquidate or cause to be liquidated any corporation 100 percent of whose common stock is owned by the board, or operate such corporation until it can be liquidated to recoup the investment of the board, but such period shall not exceed 5 years.

25.18(1)(e) (e) Take such action as may be necessary to make investments in mortgage loans or in the purchase of interests in real estate in any other state or in Canada, including but not excluding because of enumeration, qualifying to do business, filing reports, paying franchise, license or other fees and taxes, designating agents, designating an office and subjecting itself to suit.

25.18(1)(f) (f) Improve, maintain, occupy, furnish, equip, supply, and repair any building or other structure or premises which it owns in fee or in which it owns a beneficial or leasehold interest and it shall have exclusive authority to make such agreements and enter into such contracts as it deems necessary for such purpose. All noncapital costs under this paragraph shall be charged to the current income accounts of the funds having an interest in the building, structure, or premises.

25.18 Note NOTE: Par. (f) is shown as amended by 2021 Wis. Acts 177 and 267 and as merged by the legislative reference bureau under s. 13.92 (2) (i).

25.18(1)(g) (g) Engage in financial transactions whereby bearer securities issued or guaranteed by the federal government or any of its agencies, which are owned by the board, are delivered to reputable and financially responsible dealers in the securities under an agreement which provides:

25.18(1)(g)1. 1. For the replacement of the securities with securities of the same kind and amount upon demand by the board;

25.18(1)(g)2. 2. For the payment to the board by the dealer of a commission, based upon the amount of the securities, for the period of time between the delivery of the securities to the dealer and the dealer’s replacement of the securities; and

25.18(1)(g)3. 3. For the pledge and delivery by the dealer to the board of other securities issued or guaranteed by the federal government or any of its agencies, having a market value at the time of the pledge equal to at least the market value of the delivered securities, to guarantee the replacement of the securities.

25.18(1)(h) (h) Sell stock, debentures or other securities which it has the right to acquire upon the exercise of conversion rights then owned by it.

25.18(1)(i) (i) Engage in financial transactions whereby securities owned by the board, are delivered to reputable and financially responsible dealers under an agreement satisfactory to the board which provides for cash equal to the full current market value of the security as adjusted from time to time to changes in the market, and for replacement thereof with securities of the kind and amount upon demand by the board.

25.18(1)(j) (j) Engage in financial transactions whereby securities owned by the board are delivered to reputable and financially responsible dealers under an agreement satisfactory to the board which provides for delivery to the board of other securities as collateral of at least equal value to the current market value of the security as adjusted from time to time to changes in the market, and for replacement of the original securities of the same kind and amount upon demand by the board.

25.18(1)(k) (k) Engage in financial transactions whereby securities are purchased by the board under an agreement providing for the resale of such securities by the board to the original seller at a stated price together with a payment to the board of interest for the period the board holds the securities.

25.18(1)(m) (m) Employ professionals, contractors, or other agents necessary to evaluate or operate any property if a fund managed by the board has an interest in, or is considering purchasing or lending money based upon the value of, that property. Costs under this paragraph shall be paid by the fund or charged to the appropriate account under s. 40.04 (3) for which the costs were incurred.

25.18 Note NOTE: Par. (m) is shown as amended by 2021 Wis. Acts 177 and 267 and as merged by the legislative reference bureau under s. 13.92 (2) (i).

25.18(1)(n) (n) For the purpose of protecting an investment or group of assets aggregated for investment purposes against a risk, to meet nonspeculative objectives relating to rates of return or cash flow requirements or for similar purposes, enter into a contract with any person whom the board considers to be creditworthy to exchange the nature of payments or assets due to be given or received between the parties.

25.18(2) (2) In addition to the powers set forth in sub. (1) and s. 25.17, but subject to s. 25.183, the board may:

25.18(2)(a) (a) Nominate employees, members, agents or other representatives of the board to serve as directors of corporations, companies, associations or any other legal entities and allow them to serve as such representing the board. Notwithstanding ss. 19.56 and 25.16 (2), members, agents or other representatives of the board, except employees, may retain any compensation paid to them as directors. An employee of the board who receives compensation for serving as a director shall deposit the compensation with the board.

25.18(2)(b) (b) Have its employees, agents or other representatives represent the board in meetings of shareholders, limited liability companies, partnerships or associations.

25.18(2)(c) (c) Have any of its employees serve as an officer of a corporation in which it owns voting stock, or have any of its employees serve as an officer of a company, joint venture or association, or as a manager of a limited liability company, in which it owns an interest.

25.18(2)(d) (d) Insure against from the current income of any fund or trust, or pay out of current income of any fund or trust, amounts arising from any acts of employees, members or agents of the board acting as officers or directors of a company in which the board has invested the moneys in the fund or trust.

25.18(2)(e) (e)

25.18(2)(e)1. 1. Contract with and delegate to investment advisers the management and control over assets from any fund or trust delivered to such investment advisers for investment in real estate, mortgages, equities, and debt and pay such advisers fees from the current income of the fund or trust being invested. Subject to subd. 2., no more than 20 percent of the total assets of the core retirement investment trust or 20 percent of the total assets of the variable retirement investment trust may be delivered to investment advisers to manage in accounts in which the board directly holds title to all securities purchased for the accounts. The board shall set performance standards for such investment advisers, monitor such investments to determine if performance standards are being met and if an investment adviser does not consistently meet the performance standards then terminate the contract with such investment adviser.

25.18(2)(e)2. 2. For the purpose of calculating the 20 percent limit under subd. 1., the board shall not include any appreciation on assets delivered to the investment advisers. The board shall also not include for this purpose shares or participation in mutual funds, index funds, commingled funds, partnership funds, or other similar collective investment instruments in which the board does not hold title to the underlying investments purchased by the manager of the fund or the collective investment instrument.

25.18(3) (3) Notwithstanding s. 19.45 (4), investment board employees may disclose information to other investment board employees who are also students participating in a program in the School of Business at the University of Wisconsin-Madison related to applied securities analysis, or participating in a comparable program, if the only use of the information unrelated to investment board purposes would be for purposes related to the program.

25.18 History History: 1975 c. 39; 1983 a. 27, 192; 1985 a. 29; 1987 a. 27, 399; 1989 a. 119, 338, 366; 1991 a. 39; 1993 a. 112; 1995 a. 274; 1999 a. 11, 83; 2001 a. 16, 104; 2003 a. 299; 2005 a. 25, 153, 410; 2009 a. 28; 2021 a. 177, 267; s. 13.92 (2) (i).

25.182 25.182 Management authority for certain funds. In addition to the management authority provided under any other provision of law, and notwithstanding any limitation on the board’s management authority provided under any other provision of law, the board shall have authority to manage the money and property of the core retirement investment trust and, subject to s. 25.17 (5), the variable retirement investment trust in any manner that does not violate the standard of responsibility specified in s. 25.15 (2).

25.182 History History: 2007 a. 212.

25.182 Annotation The State of Wisconsin Investment Board (SWIB) has the power to make investments that meet the standard of prudence under s. 25.15 (2), even if those investments are not specifically listed in this chapter. Prior to making investments other than the types enumerated in this chapter, SWIB is not required to make a threshold finding that investing solely in the “legal list” would not meet the standard of prudence. The statutory standard for prudence remains the same whether SWIB is investing in an enumerated investment, or one that is not enumerated. Because the standard of prudence, however, takes into account the trustees’ powers to manage the funds, SWIB’s expanded powers are a relevant factor in evaluating whether SWIB has met that standard. OAG 11-08.

25.182 Annotation The State of Wisconsin Investment Board (SWIB) has the statutory authority to issue debt as part of its broad management authority over the core retirement investment trust fund, provided that SWIB satisfies the prudent person and other standards listed in s. 25.15 (2). The statutory standards apply the same way to issuing debt as a management tool as they apply to any other strategy. OAG 2-22.

25.183 25.183 Certain investments prohibited.

25.183(1) (1) Definitions. In this section:

25.183(1)(a) (a) “Derivative” means any financial contract or other instrument that derives its value from the value or performance of any security, currency exchange rate or interest rate or of any index or group of any securities, currency exchange rates or interest rates, but does not include any of the following:

25.183(1)(a)1. 1. Any security that is traded on a national securities exchange or on an automated interdealer quotation system sponsored by a securities association registered under 15 USC 78o-3, et seq.

25.183(1)(a)2. 2. Any forward contract which has a maturity at the time of issuance not exceeding 270 days.

25.183(1)(a)3. 3. Any contract of sale of a commodity, as defined under 7 USC 2, for future delivery, or any option on such a contract, traded or executed on a designated contract market and subject to regulation under 7 USC 1 to 26.

25.183(1)(a)4. 4. Any security of an open-end management investment company or investment trust, if the investment company or investment trust is registered under 15 USC 80a-1 to 80a-64.

25.183(1)(a)5. 5. Any deposit held by a financial institution.

25.183(1)(a)6. 6. Any investment specifically authorized under s. 25.17 (3) (b) and (ba).

25.183(1)(a)6e. 6e. Any collateralized mortgage obligation or other asset-backed security which either has one of the 2 highest ratings given by a nationally recognized rating service or is backed or collateralized by insured instruments, guarantees or pledges of the federal government, this state or an agency of the federal government or this state.

25.183(1)(a)6m. 6m. Any transaction permitted under s. 25.18 (1) (n), if all of the following conditions are met at the time the transaction is entered into:

25.183(1)(a)6m.a. a. The counterparty to the transaction is rated in, or has outstanding long-term debt which is rated in, one of the 2 highest ratings given by a nationally recognized rating service.

25.183(1)(a)6m.b. b. The transaction is used only for specified hedging or interest rate risk reduction purposes.

25.183(1)(a)6m.c. c. All of the board’s payment obligations under the transaction are fully backed by distinctly identified assets held in the state investment fund.

25.183(1)(a)7. 7. Any financial contract or instrument that the board determines, by rule, is not a derivative.

25.183(1)(b) (b) “Reverse repurchase agreement” means an agreement for the sale of securities by the board under which the board will repurchase those securities on or before a specified date and for a specified amount.

25.183(2) (2) Derivative investments. After May 7, 1996, the board may not purchase or acquire any derivative in the state investment fund except in accordance with rules promulgated by the board. Rules promulgated under this subsection may not permit the purchase or acquisition of derivatives in the state investment fund unless the purchase or acquisition is made for the purpose of reducing risk of price changes or of interest rate or currency exchange rate fluctuations with respect to investments held or to be held by the board.

25.183(3) (3) Reverse repurchase agreements. After May 7, 1996, the board may not enter into any reverse repurchase agreement in the state investment fund unless the repurchase of securities under the agreement is required to occur no later than the next business day.

25.183 History History: 1995 a. 274; 2021 a. 177.

25.184 25.184 Confidentiality of venture capital investment information. Information relating to investments made or considered by the board in securities of entities that are in the venture capital stage are not subject to public inspection, copying, or disclosure under s. 19.35 unless the information has been publicly released by another person.

25.184 History History: 2011 a. 32.

25.185 25.185 Minority financial advisers and investment firms; disabled veteran-owned financial advisers and investment firms.

25.185(1) (1) In this section:

25.185(1)(a) (a) “Disabled veteran-owned financial adviser” means a financial adviser certified by the department of administration under s. 16.283 (3).

25.185(1)(b) (b) “Disabled veteran-owned investment firm” means an investment firm certified by the department of administration under s. 16.283 (3).

25.185(1)(c) (c) “Minority financial adviser” means a financial adviser certified by the department of administration under s. 16.287 (2).

25.185(1)(d) (d) “Minority investment firm” means an investment firm certified by the department of administration under s. 16.287 (2).

25.185(2) (2) 

25.185(2)(a) (a) The board shall attempt to ensure that 5 percent of the total funds expended for financial and investment analysis and for common stock and convertible bond brokerage commissions in each fiscal year is expended for the services of minority financial advisers or minority investment firms.

25.185(2)(b) (b) The board shall attempt to ensure that at least 1 percent of the total funds expended for financial and investment analysis and for common stock and convertible bond brokerage commissions in each fiscal year is expended for the services of disabled veteran-owned financial advisers or disabled veteran-owned investment firms.

25.185(3) (3) The board shall annually report to the department of administration the total amount of moneys expended under sub. (2) for common stock and convertible bond brokerage commissions, the services of minority and disabled veteran-owned financial advisers, and the services of minority and disabled veteran-owned investment firms during the preceding fiscal year.

25.185 History History: 1987 a. 27; 1995 a. 27 s. 9116 (5); 1999 a. 83; 2009 a. 299; 2011 a. 32; 2011 a. 260 s. 80; 2013 a. 192.

25.186 25.186 Broker-dealers located in this state.

25.186(1) (1) In this section:

25.186(1)(a) (a) “Broker-dealer” has the meaning given in s. 551.102 (4).

25.186(1)(b) (b) “Securities trading brokerage commission” means any commission or fee paid on or for a brokered security transaction, a purchase of a security or any other kind of trade of a security.

25.186(1)(c) (c) “Security” has the meaning given in s. 551.102 (28).

25.186(2) (2) 

25.186(2)(a) (a) Of the total funds that are expended by the board for securities trading brokerage commissions in any fiscal year, the board shall pay at least 5 percent of the total funds in securities trading brokerage commissions to broker-dealers that are registered under s. 551.406, that are headquartered in this state and whose principal business operations are located in this state.

25.186(2)(b) (b) For the purpose of satisfying the requirement under par. (a), the board may not include any securities trading brokerage commissions paid to minority financial advisers and minority investment firms under s. 25.185.

25.186(3) (3) Annually, no later than September 30, the board shall submit a report to the department of administration documenting the amount of moneys expended in the preceding fiscal year by the board for securities trading brokerage commissions and the amount of moneys paid in the preceding fiscal year for securities trading brokerage commissions to broker-dealers under sub. (2) (a).

25.186 History History: 1999 a. 9; 2007 a. 196.

25.187 25.187 Operating expenditures.