On December 18, 2025, as part of the FY 2026 National Defense Authorization Act, the Holding Foreign Insiders Accountable Act (“HFIAA”) was signed into law. HFIAA amended Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as a result, beginning on March 18, 2026, directors and officers of foreign private issuers (“FPIs”) must comply with the reporting requirements of Section 16(a) of the Exchange Act. As outlined below, these reporting requirements include the filing with the SEC of personal statements reporting holdings on Forms 3, 4 and 5.
Notably, FPI directors and officers will remain exempt from the short-swing profits rule under Section 16(b) and the short sale prohibition under Section 16(c). Ten percent beneficial owners of FPIs will remain exempt from Section 16 in its entirety.
Key aspects of Section 16(a) and compliance considerations for FPIs are summarized below.
Overview of Section 16 (a) Reporting Obligations
Under Section 16(a) of the Exchange Act, a U.S. public company’s insiders (meaning directors, officers, and persons beneficially owning more than 10% of any registered class of its equity securities) are required to file reports with the US Securities and Exchange Commission (the “SEC”) disclosing transaction in that company’s securities. Historically, FPIs have been exempt from the requirements of Section 16, and insider reporting obligations were typically limited to home jurisdiction rules (if any), as well as disclosure requirements in annual reports on Form 20-F.
Effective March 18, 2026 (and subject to any exemptive relief from the SEC, as further discussed below), directors and executive officers of an FPI will be subject to Section 16(a), and required to make the following disclosures:
- Form 3 (Initial Statement of Beneficial Ownership). Any individual who is a director or officer of an FPI as of March 18, 2026 must file a Form 3 on or before that date. After the effective date, a newly appointed director or officer must file within ten calendar days of assuming the role. In connection with an FPI’s initial Section 12 registration, a Form 3 is due by the registration’s effective date.
- Form 4 (Changes in Ownership): Most transactions involving equity securities must be reported on Form 4, which must be filed by 10:00 p.m. Eastern Time on the second business day following the transaction. Reportable events include open-market purchases and sales, equity award grants, option exercises, vesting and settlement of equity awards (including tax-withholding transactions), gifts, and similar changes in beneficial ownership.
- Form 5 (Annual Statements): In certain cases (e.g., where an insider has failed to file a Form 4), a catch-up Form 5 may be required within 45 days after the end of the company’s fiscal year.
As noted above, HFIAA gives the SEC authority to exempt persons, securities or transactions from Section 16(a) if the FPI is subject to “substantially similar” reporting requirements in a foreign jurisdiction. Although jurisdictions with existing insider reporting regimes, such as Canada or the United Kingdom, could be candidates for exemption, the SEC has yet to provide relief. Accordingly, foreign private issuers should prepare to comply with the new requirements well before the March 18 deadline.
Next Steps
- Identify the Scope of Covered Officers. FPIs must determine which individuals qualify as “officers” under SEC rules. The definition of officers subject to Section 16 is set forth in Rule 16a-1(f) of the Exchange Act. In addition to the issuer’s principal executive officer and principal financial officer, covered officers include: principal accounting officer (or, if there is no such accounting officer, the controller), any vice president in charge of a principal business unit, division, or function (such as sales, administration, or finance), any other officer who performs a policy-making function, and any other person who performs similar policy-making functions for the issuer.
- Obtain EDGAR Filing Codes. Insiders who are subject to the new reporting requirements will need EDGAR filing codes. For those individuals who do not already have access to EDGAR, they must apply via a notarized Form ID application, which is subject to SEC review. Note-due to the SEC’s implementation of the EDGAR Next system in 2025, insiders with older EDGAR access codes may need to submit a new Form ID.
- Determine Beneficial Ownership. Directors and officers will be required to both direct and indirect beneficial ownership, which may include securities held by family members, through trusts, partnerships or other entities. FPIs should consult with insiders to ensure that all direct and indirect holdings are identified.
- Confirm Filing Responsibilities. While filing obligations rest with individual insiders, issuers frequently handle obtaining EDGAR credentials, form preparation and filing for directors and executive officers. Companies should confirm whether to handle Section 16(a) reporting in-house, or whether to engage external counsel.
- Update Policies and Procedures. FPIs should review insider trading policies to ensure compliance with Section 16(a). This may include pre-clearance procedures to ensure timely filings. Further, FPIs should consider whether an internal training is appropriate to inform directors and executive officers of these new obligations and potential liability.