Exchange Offers With Existing Securityholders Not Involving Sales Commissions

Statute: § 551.29(3), Wis. Stats.

Used for: Transactions by an issuer made exclusively to its existing security holders where no commission or other remuneration is paid directly or indirectly for soliciting the exchange.

Note: If remuneration is paid, the securities being offered are not "Covered Securities", as defined under NSMIA, and to be able to make the exchange offer in Wisconsin, the issuer must seek a securities registration exemption or register the securities. See "Frequently asked questions" below.

Filing requirement: Notice Filing , as set forth at § DFI-Sec 2.04(4),Wis. Adm. Code.

• Filing fee: $200
• Form required: There is no required form. File a cover letter (including the fee) not later than the date of the offering in this state, referencing the statute and rule section under which the notice is filed.
• Exhibits required: A copy of each document relating to the offering filed under the Securities Act of 1933. If a filing is not required under the 1933 Act, the issuer should file information that identifies the issuer and its address, the securities being offered, and the aggregate dollar amount of the offering.
• Review time: There is no staff review. Such review is preempted by NSMIA.

Administrative Code: § DFI-Sec 2.04(4),Wis. Adm. Code.

Frequently asked questions:

Q: Is this exemption self­executing?

    A:  No.  A notice filing is required.

Q: If remuneration is paid and the securities being offered are not "Covered Securities", is there an alternative exemption that may be available?

    A: Yes. For example, see § 551.23 (12), Wis. Stats., which permits payment of a "Stand-By" commission.

History: Adopted July 9, 1998 to reflect the adoption of the National Securities Markets Improvement Act of 1996.