Wis. Admin. Code Department of Financial Institutions DFI-Sec 2.027 - Exemption for solicitations of interest prior to registration or exemption

(1) A transaction exemption is available under s. 551.203, Stats., for an offer, but not a sale, of a security made by or on behalf of an issuer pursuant to delivery of a written document or use of a newspaper publication or scripted media broadcast containing the information prescribed in the form in s. DFI-Sec 9.01(1) (c), for the sole purpose of soliciting an indication of interest from prospective purchasers in receiving a prospectus, private placement memorandum or equivalent disclosure document for the security, if the following conditions are satisfied, except to the extent that sub. (2) is applicable.

(a) The issuer intends that sales of the security be either:

1. Registered under ch. 551, Stats.; or

2. Exempt from registration under an available exemption in any subsection of s. 551.202, Stats., or any exemption rule under s. 551.203, Stats.

(b) Not later than the date of the initial solicitation of interest made under this section, the offeror shall file with the division a completed solicitation of interest form as prescribed in s. DFI-Sec 9.01(1) (c), together with any other materials to be used to conduct solicitations of interest, including, but not limited to, the script of any broadcast to be made and a copy of any notice to be published. Material amendments to the solicitation of interest form or to any related materials used to conduct solicitations shall be filed with the division not later than the date of their first use. Any written document under this subsection may include a coupon, returnable to the issuer indicating interest in a potential offering, revealing the name, address and telephone number of the prospective purchaser.

(c) The text of any published notice or script for broadcast, and any printed material delivered in any solicitation of interest under this section, shall begin with the disclosures and information required in, and in the format of, the solicitation of interest form specified in s. DFI-Sec 9.01(1) (c).

(d) The offeror does not know, and in the exercise of reasonable care could not know, that any of the issuer's officers, directors, general partners, controlling persons or affiliates thereof are or would be disqualified from use of the registration exemption in s. DFI-Sec2.029 as a result of any of the causes specified in s. DFI-Sec 2.029(3) (a) 1. to 4. except for any person or persons subject to a disqualification who meets the conditions for waiver in s. DFI-Sec 2.029(3) (b) 1.

(e) Solicitations of interest pursuant to this section shall not be made after the filing of either a registration statement under ch. 551, Stats., the filing of materials required for a claim of registration exemption under s. 551.202 or 551.203, Stats., or use of any available self-executing exemption under s. 551.202 or 551.203, Stats.

(f) Sales of the securities that are the subject of solicitations of interest under this section shall not be made until 20 calendar days after the last delivery of a solicitation of interest document or a radio or television broadcast or other media publication.

(2)

(a) A failure to comply with any of the conditions in sub. (1) will not result in the loss of the securities registration exemption under this section for any offer to a particular individual or entity if the offeror demonstrates each of the following are met:

1. The failure to comply did not pertain to a condition directly intended to protect that particular individual or entity; and

2. The failure to comply was insignificant with respect to the offering as a whole; and

3. A good faith and reasonable attempt was made to comply with the conditions in sub. (1) (a) to (f).

(b) Where an exemption is established only through reliance upon this subsection, the failure to comply with the conditions in sub. (1)(a) to (f) shall constitute a basis for action that may be taken by the division under s. 551.603, Stats., and shall constitute a basis for action that may be taken by the division under s. 551.204, Stats., to deny or revoke the exemption as to a specific security or transaction.

Notes

Wis. Admin. Code Department of Financial Institutions DFI-Sec 2.027

CR Register, December, 1995, No. 480, eff. 1-1-96; renum. from SEC 2.028 and am. (1) (c), Register, December, 1996, No. 492, eff. 1-1-97; CR 08-077: am. (1) (intro.), (a) 2., (d), (e) and (2) (b) Register December 2008 No. 636, eff. 1-1-09.