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Non-Profit (and Non-Wisconsin) Corporation Debt Securities

Statute: § 551.201(7), Wis. Stats. and Rules: DFI-Sec 2.01(5)(a) or (b), Wis. Adm. Code.

Used for: Offers and sales of debt securities by a non-Wisconsin, non-profit corporation organized for specified purposes where the corporation must either meet a prescribed earnings test based on audited financial statements or be in existence for less than 3 years and the debt securities are collateralized by a first mortgage meeting specified requirements.

Filing requirement: Notice Filing, as set forth at §§ DFI-Sec 2.01(5) and 2.03, Wis. Adm. Code.

  • Filing fee: $200, as set forth at § DFI-Sec 7.01(2)(b), Wis. Adm. Code made payable to Wisconsin DFI-Division of Securities.
  • Form required: There is no required form. File a cover letter (including the fee) at least ten days prior to the offering in this state, referencing the statute or rule section under which the notice is being made and the basis of the security's qualification.
  • Exhibits required: A copy of the prospectus, offering document, trust indenture, all other material to be delivered to offerees in connection with the transaction, and all other information the Division may require after the filing. If advertising is published or circulated in connection with the transactions or the securities underlying the transactions for which this exemption is claimed, it must be filed with the Division and may not be used unless and until the Division has allowed its use, unless exempt from this requirement under § DFI-Sec 7.02(1), Wis. Adm. Code.
  • Review time: Ten calendar days, unless extended pursuant to § DFI-Sec 2.03(2), Wis. Adm. Code.

Administrative Code references: §§ DFI-Sec 2.01(5), 3.03(4)(h) and (i), 3.04, 7.02, and 7.06, Wis. Adm. Code.

NASAA Guidelines: See § DFI-Sec 3.03(4)(h) and (i), Wis. Adm. Code. Note: Only the disclosure provisions of the guidelines may be applied.

Frequently asked questions:

Q: Is this exemption self-executing?

    A: No. A notice filing is required.

Q: Is it necessary to file a Consent to Service of Process with the Division in order to claim this exemption?

    A: No.

Q: Is this exemption available for non-profit corporations organized in Wisconsin?

    A: Wisconsin non-profit corporations may use this exemption, but most Wisconsin non-profit corporations use the exemption set forth at rule DFI-Sec 2.01(4)(a) or (b), Wis. Adm. Code under § 551.201(7), Wis. Stats.

Q: Does the exemption specify requirements for financial statement presentation?

    A: Yes. If the earnings test is used when claiming the availability of the exemption, the financial statements must be audited.

History: Predecessor statute 551.23(15), Wis. Stats., adopted January 1, 1970. There is no parallel provision in the Uniform Securities Act of 1956. Replaced and Recreated effective January 1, 2009 incident to enactment to Uniform Securities Act of 2002 and rules DFI-Sec 2.01(5)(a) or (b) under 551.201(7), Wis. Stats.


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