Used for: Offers or sales of securities to
- ANY “accredited investor” as defined federally in Regulation D, Rule 501(a). [17 CFR 230.501(a)]. However, for any sale in Wisconsin to an individual accredited investor as defined in Rule 501(a)(5) or (6), compliance with the Consent to Service of Process (Form U-2) filing requirement therein is necessary in order to claim the exemption. That filing requirement does include 3 categories of exclusions from the need to file.
Filing requirement: If, as discussed above, the Consent to Service of Process filing requirement is applicable for any sale in Wisconsin to an individual accredited investor as defined in Rule 501(a)(5) or (6), a completed Form U-2 must be filed and received by the Division prior to the first sale to an individual accredited investor in Wisconsin. A cover letter providing basic information about the issuer and the offering should accompany the Form U-2. No fee is required.
Frequently asked questions:
Q: Is this exemption self-executing?
A: For purposes of the "accredited investor" provision, it depends upon whether the Consent to Service of Process filing requirement is triggered as explained above for a sale to an individual accredited investor in Wisconsin.
Related considerations: The licensing exemptions set forth at § 551.401(2), 551.402(2), 551.403(2), and 551.404(2), Wis. Stats., which allow transacting securities business in Wisconsin as a broker-dealer, agent, investment adviser or investment adviser representative without being licensed, are NOT applicable where the activities involve individual accredited investors in Wisconsin.
History: Predecessor statute 551.23(8)(g), Wis. Stats., enacted December 3, 1993. Amended October 1, 2002 to delete "individual" concept and incorporate by reference the federal accredited investor definition in Rule 501(a) under Regulation D [17 CFR 230.501(a)]. Repealed and recreated effective January 1, 2009 as 551.202(13)(am) to apply to all accredited investors, but establishing a Consent To Service filing requirement for sales to individual accredited investors in Wisconsin unless an exclusion from the filing requirement is available.