Solicitations of Interest
Testing the Waters
Statute: § 551.203, Wis. Stats.
Administrative Code: § DFI-Sec 2.027, Wis. Adm. Code.
Used for: Solicitations of Interest prior to registration or exemption ("Testing the Waters" exemption).
Note: Issuers are ineligible to use this exemption if the disqualification provisions of § DFI-Sec 2.029 (3), Wis. Adm. Code, apply to them.
To use this exemption, the issuer must intend either to register its securities in Wisconsin or to use another exemption from the registration process for the sale of its securities. This procedure allows for offers only. Sales are permitted only after the securities are registered in this state, or an exemption from registration becomes available for the sales. During the solicitation-of-interest period, the issuer cannot solicit or accept money or a commitment to purchase securities. There are certain very specific, detailed steps that the issuer must follow. Any offer that fails to conform to the conditions of the procedure may constitute an unregistered, unlawful offer for which civil, administrative, and criminal liabilities may attach under the Wisconsin Securities Law. Following are the required steps:
- Not later than the date of the initial solicitation of interest, the potential issuer must file with the Division a completed Form SOI, together with any other materials to be used to conduct the solicitations of interest, including, but not limited to, the script of any broadcast to be made and a copy of any notice to be published. No fee is required.
- Not later than the date of use, the potential issuer must file with the Division amendments to materials already filed or additional materials to be used to conduct the solicitations of interest.
- The text of any published notice or script for broadcast, and any printed material delivered in any solicitation of interest, must begin with the disclosures and information required by Form SOI and follow the format of that form.
- The solicitations of interest must stop once the potential issuer files a registration application or files a claim of exemption or commences use of any self-executing exemption.
- Sales are not permitted until 20 days after the last delivery of a solicitation-of-interest document or a radio or television broadcast or other media publication, and an exemption from registration for the sales becomes available or the securities become registered.
- Filing fee: None.
- Form required: Solicitation of Interest Form, as set forth at § DFI-Sec 9.01(1)(c), Wis. Adm. Code.
- Exhibits required: Any materials to be used to conduct the solicitations of interest, including but not limited to, the text of any published notice or script for broadcast and any printed material to be distributed in any solicitation of interest.
- Review time: Not applicable.
Frequently asked questions
Q: Is this exemption self-executing?
A: No. A Solicitation of Interest filing is required.