SEC Adopts Final Rules Under the Holding Foreign Insiders Accountable Act: New Section 16 Reporting Requirements for Foreign Private Issuers
The Securities and Exchange Commission has adopted final rule and form amendments to implement the Holding Foreign Insiders Accountable Act (HFIA Act). These changes significantly expand insider reporting obligations for directors and officers of foreign private issuers (FPIs) with securities registered under the Securities Exchange Act of 1934.
Effective March 18, 2026, directors and officers of qualifying FPIs must begin filing Section 16 reports disclosing their equity holdings and transactions. This development aligns foreign private issuer insider disclosure requirements more closely with those imposed on domestic public companies and materially increases transparency in U.S. capital markets.
Congress enacted the HFIA Act on December 18, 2025, amending Section 16(a) of the Securities Exchange Act of 1934. The amendment requires directors and officers of Exchange Act reporting foreign private issuers to file insider ownership reports with the SEC.
Historically, most directors and officers of FPIs were exempt from Section 16 reporting. That exemption limited public visibility into insider transactions at foreign issuers accessing U.S. markets.
The HFIA Act eliminates that broad exemption. As a result:
- Directors and officers of Exchange Act reporting FPIs must file Section 16 reports.
- All filings must be submitted electronically.
- Reports must be filed in English.
- “10 percent holders” of FPI equity securities remain excluded from Section 16(a) reporting obligations.
This targeted reform reflects Congress’s intent to enhance transparency while avoiding a complete extension of Section 16 liability to large foreign shareholders.
Section 16(a) requires certain insiders to disclose their beneficial ownership of equity securities and report changes in that ownership. For domestic issuers, this framework has long served as a central transparency mechanism.
Under the HFIA Act and the SEC’s final rule amendments, directors and officers of FPIs with a class of equity securities registered under Section 12 of the Exchange Act must:
- File initial ownership reports.
- Report subsequent changes in ownership.
- Submit filings electronically through EDGAR.
- Provide disclosures in English.
The effective date of March 18, 2026, gives affected issuers and insiders a defined compliance timeline. Companies must use this window to implement reporting systems, update governance documents, and educate insiders regarding filing obligations.
The HFIA Act required the SEC to issue final regulations within 90 days of enactment. The Commission responded by revising specific rules and forms under the Exchange Act to reflect the statutory changes.
The SEC amended Rule 3a12-3(b), which previously provided a broad exemption for foreign private issuers from Section 16.
The amendment removes that exemption in full and replaces it with narrower relief. Under the revised framework:
- FPIs are no longer exempt from Section 16(a) reporting for directors and officers.
- Exemptions remain for Section 16(b) short-swing profit recovery provisions.
- Exemptions remain for Section 16(c) short-selling prohibitions.
This structure increases disclosure obligations while limiting exposure to certain liability provisions traditionally associated with Section 16.
The SEC also revised Rule 16a-2, which identifies the persons and transactions subject to Section 16.
The updated rule explicitly excludes 10 percent holders of FPI equity securities from Section 16(a) reporting requirements and related rules. Directors and officers must comply with the new reporting obligations, but beneficial owners exceeding 10 percent ownership remain outside the Section 16(a) framework for FPIs.
This distinction underscores Congress’s focus on management-level transparency rather than broad shareholder regulation.
The HFIA Act mandates electronic filing and English-language disclosure for Section 16 reports submitted by FPI insiders.
Electronic filing through EDGAR ensures:
- Immediate public availability.
- Standardized formatting.
- Greater accessibility for investors and regulators.
Requiring English-language filings promotes consistency and enhances investor comprehension. Foreign issuers that previously relied solely on home-country disclosure regimes must now integrate U.S.-specific reporting controls into their compliance infrastructure.
The new reporting regime carries significant practical and governance consequences.
Foreign private issuers must implement procedures to:
- Track insider transactions in real time.
- Monitor beneficial ownership calculations.
- Coordinate with legal and compliance teams.
- Educate directors and officers on reporting deadlines and triggers.
Companies that lack formal insider trading compliance programs must establish them before the March 2026 deadline.
Public disclosure of insider holdings and transactions often attracts attention from investors, analysts, and regulators. Directors and officers of FPIs should expect scrutiny similar to that faced by insiders of domestic issuers.
Although the amendments preserve exemptions from Section 16(b) short-swing profit recovery and Section 16(c) short-selling restrictions, the reporting obligation alone materially alters the transparency profile of foreign private issuers in U.S. markets.
The HFIA Act narrows the regulatory gap between domestic issuers and foreign private issuers. Boards and executive teams must now align governance practices more closely with U.S. public company standards.
This shift may require updates to:
- Insider trading policies.
- Pre-clearance procedures.
- Blackout periods.
- Disclosure controls and procedures.
Companies that proactively adapt will reduce regulatory risk and strengthen investor confidence.
The SEC has published the adopting release on its website, and the final rule amendments will appear in the Federal Register. Issuers and counsel should review the release carefully to understand technical revisions, interpretive guidance, and transition considerations.
Foreign private issuers with securities registered under Section 12 should act promptly to assess exposure, identify covered insiders, and implement compliance systems. The March 18, 2026 effective date establishes a firm deadline. Companies that delay preparation risk enforcement exposure and reputational harm.
By removing the longstanding Section 16 exemption for foreign private issuers, the HFIA Act fundamentally reshapes insider reporting obligations for FPI directors and officers. Market participants should treat these amendments as a structural shift in U.S. securities regulation rather than a routine technical update.
For more information, contact the securities lawyers at Sallah Astarita & Cox, at 212-509-6544 or visit Securities Lawyer
Last updated on March 3rd, 2026
