New U.S. Insider Reporting Rules for Foreign Private Issuers: Who Must File, and Who Gets a Pass

Summary

• Section 16(a) reporting extends to FPI directors and officers from March 18, 2026
• Exemption available for FPIs incorporated in six qualifying jurisdictions and subject to qualifying regulations (including EU MAR and UK MAR)
• Non-exempt insiders must file Form 3 by March 18, 2026

Background

The U.S. Securities and Exchange Commission (the “SEC”) adopted final rules to implement the Holding Foreign Insiders Accountable Act (the “HFIAA”) on February 27, 2006, which take effect on March 18, 2026. The SEC then issued an order on March 5, 2026, granting certain exemptions from the new requirements. In connection with the HFIAA and the new rules coming into effect on March 18, key points of the new requirements are discussed below.¹The final rule and form amendments can be found here.  The Fact Sheet accompanying the release can be found here.  The SEC’s March 5 order can be found here.

Who is Affected?

The most important consequence of the new requirements is that the reporting obligations of Section 16(a) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), will, from March 18, 2026, apply to directors and officers of foreign private issuers (“FPIs”). Prior to this change, directors and officers of FPIs were exempt from publicly disclosing beneficial ownership (and changes to such beneficial ownership) of equity securities registered under Section 12 of the Exchange Act. From March 18, 2026, directors and officers of FPIs will be required to publicly disclose beneficial ownership of such equity securities and changes thereto on Form 3, 4 and 5, unless an exemption applies.

The new disclosure requirements do not apply to persons holding 10% or more of such equity securities of an FPI, unless such persons are also directors and/or officers of such FPI. The HFIAA and the new rules only impact the disclosure requirements under Section 16(a). Directors and officers of FPI remain exempt from the short-swing profit provisions of Section 16(b) and the short-sale prohibitions of Section 16(c).

Who is Exempt?

Pursuant to the exemptive order issued on March 5, 2026, directors and officers of an FPI which is both (i) incorporated or organized in a “qualifying jurisdiction” and (ii) subject to a “qualifying regulation” are exempt from the Section 16(a) disclosure requirements. The “qualifying regulation” may be a regulation of the jurisdiction of incorporation of the FPI (which is itself a qualifying jurisdiction) or a regulation of another qualifying jurisdiction.

The qualifying jurisdictions are:

• Canada;
• Chile;
• European Economic Area;
• South Korea;
• Switzerland; and
• United Kingdom.

The qualifying regulations, which were determined by the SEC to impose substantially similar obligations as the public disclosure requirements of Section 16(a) of the Exchange Act, are:

In order for the exemption to apply, two additional conditions must be met.

1. The director or officer must actually report beneficial ownership under the applicable qualifying regulation. This means that the director or officer must publicly disclose beneficial ownership one way or another—either under the applicable qualifying regulation or under Section 16(a).
2. The public disclosure made under the applicable qualifying regulation must be made available to the general public in English within two business days of posting, on the website of the relevant securities regulator, the relevant stock exchange or, where the English version cannot be filed through the regulator’s own database, the FPI itself.

While the SEC has left open the possibility that the exemption may be extended to FPIs in other jurisdictions from time to time, it has not given any immediate indications that any additional exemptions will be forthcoming or committed to granting further exemptions.

Filing Deadlines

If the exemption does not apply, the basic requirement is that each director or officer of an FPI must file a Form 3 via EDGAR by March 18, 2026 and subsequently file Form 4 and Form 5 as and when required. According to additional clarification provided by the SEC staff via March 9 and March 12 FAQs on the SEC website²The FAQs can be found here.:

In order to file the requisite forms with the SEC via EDGAR, the director or officer must obtain EDGAR codes and be registered to make filings on EDGAR Next. The director or officer obtains EDGAR codes by submitting a notarized Form ID to the SEC. If the FPI is obtaining EDGAR codes on behalf of a director or officer, the FPI would first need to obtain a notarized power of attorney from the director or officer and submit it to the SEC before submitting the notarized Form ID.

In relation to this, the SEC staff clarified in the FAQs that it would not recommend enforcement action against a director or officer of an FPI for the untimely filing of a Section 16(a) report caused by lack of EDGAR access in light of the unusually large number of Form ID applications submitted as a result of the HFIAA, so long as (i) the director or officer submitted the completed Form ID and the related required documents before March 18, 2026, (ii) the director or officer did not receive EDGAR access by March 18, 2026, and (iii) the director or officer files the required Section 16(a) report after receiving EDGAR access but in no event later than April 1, 2026.

Ongoing Filing Obligations

After the initial Form 3 filing, regular Section 16(a) filings will be required. A Form 4 must be filed within two business days of each transaction that results in a change in beneficial ownership. A Form 5 may be required to be filed within 45 days of the end of the FPI’s financial year to report certain transactions eligible for deferred reporting. If it is intended that the FPI will be making the Section 16(a) filings on behalf of the director or officer going forward, the FPI must obtain a power of attorney from the director or officer (which does not need to be notarized) authorizing the FPI to do so.

Immediate Action Items for FPIs

With the new Section 16(a) requirements on FPIs in effect, FPIs will need to:

• carefully analyze which directors and officers will need to make Section 16(a) filings going forward (and which ones are exempt);
• obtain the requisite powers of attorney to be able to make the Section 16(a) filings on behalf of directors and officers;
• understand how (and which aspects of) their equity compensation and incentive programs for directors and officers may now trigger these reporting requirements;
• maintain controls and procedures around records of beneficial ownership by directors and officers (and changes thereto) so that correct information can be filed on a timely basis; and
• set up internal procedures to ensure continuing compliance with the new requirements.