Stock Splits
Stock Dividends
Dividends (Stock)
Dividend Reinvestment Plans

Statute: §  551.23(14), 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; Advertising Filing Requirement. No filing or Consent to Service of Process is necessary in order to claim this exemption. However, if any advertising is "published" or "circulated," as defined in § DFI-Sec 1.02(1)(a) and (b), Wis. Adm. Code, in connection with this transaction or the securities underlying this transaction, it must be filed with the Division and may not be used unless and until the Division has allowed its use. If advertising is filed, a fee of $10 per item, as set forth at § DFI-Sec 7.01(4), Wis. Adm. Code, must accompany the filing.

Administrative Code references: §§ DFI­Sec 2.02(7) and 7.02, Wis. Adm. Code.

Frequently asked questions:

Q: Is this exemption self­executing?

    A: Yes. No filing or Consent to Service of Process is required.  However, if any advertising is published or circulated, it must be filed with the Division and may not be used unless and until the Division has allowed its use.

Q: May a non­corporate entity claim this exemption?

    A: This exemption is available only where the issuing entity is organized as a corporation or a business trust.

Q: May this exemption be used for a "reverse stock­split"?

     A: No. See § DFI­Sec 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 may be available in § 551.23(12), 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?

    A: No.

History:  Adopted January 1, 1970.  There is no parallel provision in the Uniform Securities Act.  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.