Section DFI-Sec 2.01 - Exempt securities(1)(a) Any revenue obligation payable from payments to be made in respect of property or money used under a lease, sale or loan arrangement by or for a nongovernmental industrial or commercial enterprise, is exempted under s. 551.201(1), Stats., if any of the following are met:1. The enterprise is a public utility described under s. 551.201(5), Stats., having securities registered under section 12 of the securities exchange act of 1934, or is a wholly-owned subsidiary of one or more of such utilities.2. Any securities of the enterprise, or any securities of an unconditional guarantor of all payments under the lease, sale or loan arrangement, are covered securities under section 18(b)(1) of the securities act of 1933 or are exempt under s. 551.201(6), Stats.3. A notice of the proposed offering is filed with the division prior to the offering, including a trust indenture meeting the requirements of s. DFI-Sec 3.04, an official statement or a prospectus meeting the requirements of s. DFI-Sec3.03 that contains financial statements for the enterprise and additional information as the division may require, and the division does not by order deny the exemption within 10 days of the date the notice is filed.(b) Any guarantee of, or any put option or similar agreement to purchase from a holder of, any security exempt under s. 551.201(1), Stats., is exempted from s. 551.301, Stats.(3) The Chicago stock exchange is designated as a national securities exchange qualifying for registration exemption status under s. 551.201(6), Stats., but only with respect to Tier 1 securities listed on that exchange, provided that proposed rule changes with respect to its Tier 1 securities are approved by the U.S. securities and exchange commission, and provided that a Memorandum of Understanding is entered into and is in force and effect between the Chicago stock exchange and the north american securities administrators, inc. The designation is subject to the authority of the division to revoke the designation by order based upon a determination that the forecast exchange's requirements for listing or maintenance for Tier 1 securities as contained in the Memorandum of Understanding and as published in the Commerce Clearing House NASAA Reports, have been so changed or insufficiently applied that the protection of investors contemplated by the exemption no longer exists. The division also may deny or revoke, by order, registration exemption status accorded by this paragraph with respect to a specific issue of securities or category of securities on the exchange. The issuance of any order by the division under this paragraph shall be in accordance with the provisions of the Memorandum of Understanding relating to notice of and opportunity for hearing, written findings of fact and conclusions of law, and judicial review.(4)(a) The exemption for the offer or sale of a note, bond, debenture or other evidence of indebtedness issued by a person or issuer listed in s. 551.201(7)(intro.), Stats., that is a domestic, Wisconsin corporation to persons other than its members is available for use if the issuer or a registered broker-dealer files a notice of the proposed issuance with the division prior to the offering, including: a trust indenture meeting the requirements of s. DFI-Sec 3.04, under which the evidence of debt is proposed to be issued; a prospectus describing the issuer, the trust indenture and the evidence of debt proposed to be issued, which shall be given or sent to each person to whom an offer of such evidence of debt is made at the time or times specified in s. DFI-Sec 3.03(1); and such additional information as the division may require; and the division does not by order deny or revoke the exemption within 10 days.(b) The exemption for the offer or sale of a note, bond, debenture or other evidence of indebtedness issued by a person or issuer listed in s. 551.201(7)(intro.), Stats., that is a domestic, Wisconsin corporation, is available for use without the need for a filing with the division if the securities are sold exclusively to its members. A person does not become a "member" for purposes of this subdivision solely by reason of the purchase of the issuer's securities.(5) The exemption for the offer or sale of a note, bond, debenture or other evidence of indebtedness issued by a person or issuer listed in s. 551.201(7)(intro.), Stats., that is not a domestic, Wisconsin corporation, is available for use if the issuer or a registered broker-dealer files a notice of the proposed issuance with the division prior to the offering, identifying the security and the basis of its qualification under par. (a) or (b) and includes: a trust indenture meeting the requirements of s. DFI-Sec 3.04, under which the evidence of debt is proposed to be issued; a prospectus describing the issuer, the trust indenture and the evidence of debt proposed to be issued, which shall be given or sent to each person to whom an offer of such evidence of debt is made at the time or times specified in s. DFI-Sec 3.03(1); and such additional information as the division may require; and the division does not by order deny or revoke the exemption within 10 days. The security qualifies under this exemption if the issuer and any predecessor have not defaulted within the current fiscal year or the 3 preceding fiscal years in any fixed interest or principal obligation; and the security qualifies under either of the following: (a)1. The issuer and its predecessors have not been in existence for 3 years, and the securities proposed to be sold are secured by a mortgage or deed of trust upon land and buildings which is or will become a first lien at or prior to the issuance of such evidences of debt, or provisions satisfactory to the division are made for impounding the proceeds from their sale until such first lien is established, and the total amount of such securities does not exceed 50% of the then fair market value of the land and buildings included in such mortgage or deed of trust, less the amount of any unpaid special assessment taxes.2. A signed or conformed opinion of counsel for the issuer or other evidence satisfactory to the division shall be provided with respect to the validity and rank of the lien of the mortgage or deed of trust, and evidence satisfactory to the division shall be provided that the total amount of the securities proposed to be offered does not exceed 50% of the then fair market value of the land and buildings included in the mortgage or deed of trust, less the amount of any unpaid special assessment taxes.(b)1. The issuer or its predecessors have had an excess of revenues over expenses, excluding interest expense, provision for depreciation and extraordinary items, for each of the 2 fiscal years next preceding such offer or sale, or average net revenues for the last 3 fiscal years next preceding such offer or sale, of not less than 1-1/2 times the aggregate annual interest requirements on the issue of securities to be sold under this subsection and all securities of equal or prior rank to be outstanding immediately after such sale.2. A balance sheet of the issuer as of the end of the last fiscal year preceding the date of filing, and statements of income and changes in financial position and an analysis of surplus of the issuer shall be filed for each of its 3 immediately preceding fiscal years meeting the requirements of s. DFI-Sec 7.06.Wis. Admin. Code Department of Financial Institutions DFI-Sec 2.01
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