Dividend Reinvestment Plans
Statute: § 551.202(22), Wis. Stats.
Used for: Corporate stock splits and stock dividends; business trust share splits and share dividends; and dividend reinvestment plans.
Note: The exemption requires that nothing of value be given for the dividend other than the surrender of a right to a cash or property dividend when each investor may elect to take the dividend in cash or property and participates in the plan voluntarily.
Filing requirement: Self-Executing. No filing or Consent to Service of Process is necessary in order to claim this exemption.
Administrative Code references: §§ DFI-Sec 2.02(7)
Frequently asked questions:
Q: Is this exemption selfexecuting?
A: Yes. No filing or Consent to Service of Process is required.
Q: May this exemption be used for a "reverse stocksplit"?
A: No. See § DFI-Sec 2.02(7)(a). Wis. Adm. Code.
Q: If a dividend reinvestment plan has a feature which allows shareholders to purchase additional shares by means of optional cash payments, is the exemption available for the optional share purchase portion of the plan?
A: No. However, an alternative exemption (for offers to existing security holders) may be available in § 551.202(15), Wis. Stats.
Q: If an issuer met the requirements for use of this exemption on a self-executing basis at the time of passage of NSMIA, have there been any changes to the filing requirements in Wisconsin after that date?
History: Predecessor statute 551.23(14), Wis Stats., adopted January 1, 1970. There is no parallel provision in the Uniform Securities Act of 1956. Amended effective 6/21/96 to include "share splits and "share dividends" by business trusts. Prior to the 1996 amendment, only stock splits and stock dividends by corporations qualified for the exemption. Repealed and recreated January 1, 2009.