AB 350

Under the Wisconsin Uniform Securities Law (WUSL), a person may not offer

or sell any security in this state unless the security is registered with the Division

of Securities in the Department of Financial Institutions (division), the security or

transaction is exempt from registration, or the security is a federal covered security.

Certain notice filing requirements may apply to federal covered securities. A

"security" is defined broadly under the WUSL and includes stocks, notes, bonds,

investment contracts, limited partnership interests, and certain other financial

interests. This bill creates an exemption from registration for certain securities,

revises requirements under current law regarding certain exempt transactions, and

exempts additional transactions from registration.

Security exemption.

Under current law, certain securities are exempt from

registration with the division, including a security issued by certain banks or other

depository institutions, if the security represents an interest in or direct obligation

of the bank or other depository institution or if the security is guaranteed by the bank

or other depository institution. This bill also exempts a security issued by a bank or

savings and loan holding company, as defined under federal law, if the security

represents an interest in or direct obligation of the holding company or if the security

is guaranteed by the holding company. In addition, to qualify for the exemption, the

holding company must have no significant assets other than securities issued by

banks or other depository institutions that are exempt from registration under

current law.

Exempt transactions under current law.

Under current law, certain

securities transactions are exempt from registration with the division. Among these

exempt transactions is a sale or offer to sell to an accredited investor, as defined

under federal law. For purposes of this registration exemption, "accredited investor"

includes, among others, banks or other financial institutions; federally registered

broker-dealers; insurance companies; investment companies; private business

development companies; certain persons having designated positions with the

securities issuer; certain trusts with assets of more than $5,000,000; and entities in

which all of the equity owners are accredited investors. For purposes of this

registration exemption, an "accredited investor" also includes any person who comes

within any of the following categories, or whom the securities issuer reasonably

believes comes within any of the following categories, at the time of the sale of the

securities to that person: 1) any natural person who had an individual income in

excess of $200,000 in each of the two most recent years or joint income with that

person's spouse in excess of $300,000 in each of those years and has a reasonable

expectation of reaching the same income level in the current year; or 2) any natural

person whose individual net worth, or joint net worth with that person's spouse,