Used for: Corporate stock splits and stock dividends; business trust share splits and share dividends; and dividend reinvestment plans

Note: The exemption requires that nothing of value be given for the dividend other than the surrender of a right to a cash or property dividend when each investor may elect to take the dividend in cash or property and participates in the plan voluntarily.

Filing requirement: Self-executing. No filing or Consent to Service of Process is necessary to claim this exemption.

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Q: May this exemption be used for a "reverse stock ­split"?

A: No. See Wis. Admin. Code s. DFI-Sec 2.02(7)(a).

Q: If a dividend reinvestment plan has a feature which allows shareholders to purchase additional shares by means of optional cash payments, is the exemption available for the optional share purchase portion of the plan?

A: No.  However, an alternative exemption (for offers to existing security holders) may be available in Wis. Stat. s. 551.202(15)​​. 

Q: If an issuer met the requirements for use of this exemption on a self-executing basis at the time of passage of the National Securities Markets Improvement Act of 1996 (NSMIA), have there been any changes to the filing requirements in Wisconsin after that date?

A: No.

History: Predecessor statute Wis. Stat. s. 551.23(14) adopted January 1, 1970.  There is no parallel provision in the Uniform Securities Act of 1956.  Amended effective June 21, 1996 to include "share splits and "share dividends" by business trusts. Prior to the 1996 amendment, only stock splits and stock dividends by corporations qualified for the exemption. Repealed and recreated January 1, 2009.