Foreign Private Issuers to Be Subject to Section 16(a) Reporting Obligations

On Dec. 18, President Trump signed into law the Holding Foreign Insiders Accountable Act (the HFIAA). The HFIAA requires directors and officers of foreign private issuers (FPIs) to file reports with the Securities and Exchange Commission (SEC) regarding their holdings of and transactions in the issuer’s equity securities under Section 16(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act).

This development was previewed in earlier legislation and aligns with the SEC’s sentiment raised in its recent concept release regarding the FPI regime that FPIs should be subject to levels of transparency comparable to U.S. domestic issuers.[1] The HFIAA does not extend Section 16(a) reporting obligations to greater than 10% shareholders of FPIs or subject FPI insiders to Section 16(b)’s short-swing liability and profit disgorgement obligation. The amendments will be effective as of March 18, 2026, and represent a significant change for FPIs and their directors and officers that will require advance preparation.

Compliance Requirements

Starting March 18, 2026, an FPI’s directors and officers (each, a Section 16(a) insider and collectively, Section 16(a) insiders) must report holdings of and transactions in securities of the issuer that such insider beneficially owns on Forms 3, 4 or 5, as applicable. In order to file a Section 16 report, each Section 16(a) insider must have EDGAR filing codes that are enrolled in EDGAR Next.[2] Section 16 reports must be filed on EDGAR by 10 p.m. ET on the applicable due date.[3]

Like their domestic counterparts, FPIs should first evaluate who qualifies as a director or officer for the purpose of Section 16(a). A director includes any person serving in such capacity under the laws of the jurisdiction of incorporation of the issuer and is usually identified in an issuer’s annual report on Form 20-F or in its IPO registration statement on Form F-1 with subsequent intra-year changes in board composition generally announced on Form 6-K.[4] Rule 16a-1(f) provides the definition of “officer” for Section 16 purposes and is the same as the definition that is used to determine “executive officer” status for the purpose of the Form 20-F and Rule 144, with the addition of the issuer’s principal accounting officer (or controller in the absence thereof).

Next, an FPI’s in-house legal and compliance team should educate its Section 16(a) insiders about their new obligations, remind them of the company’s applicable procedures for preclearing transactions in company securities and establish a protocol for preparing and submitting Section 16 reports on behalf of the issuer’s Section 16(a) insiders. This includes executing any necessary powers-of-attorney, confirming EDGAR filing codes and access and liaising with insiders’ brokers to confirm communications regarding insiders’ transaction in company securities.

Exemptions and Upcoming SEC Guidance: What FPIs Should Watch For

While FPIs and their Section 16(a) insiders should prepare for compliance by March 18, 2026, further developments could occur and FPIs should monitor this closely. The amendments empower the SEC to exempt any person, security or transaction (or any classes thereof) from Section 16(a) reporting requirements to the extent they are subject to “substantially similar” requirements under the laws of a foreign jurisdiction. It is not clear how or when the SEC will exercise its exemptive authority, but it is conceivable that the SEC could issue jurisdiction-specific exemptions. In particular, FPIs listed in Canada, Europe and the U.K. are subject to insider reporting regimes which the SEC could find sufficiently similar to Section 16(a) to warrant exemptive relief.

Nevertheless, all FPIs should prepare their Section 16(a) insiders to comply with the amendments, including filing a Form 3 reporting their initial beneficial ownership, by March 18, 2026. In addition, between now and March 18, 2026, the SEC is required to issue final rules implementing the amendments. The rules will likely provide additional clarity but may also extend FPIs’ related obligations, by, for example, requiring delinquent Section 16 filings to be disclosed in an FPI’s annual report on Form 20-F. FPIs and their Section 16 insiders should be on the lookout for SEC guidance regarding the HFIAA’s implementation, the proposal of related SEC rules and potential exemptive relief.

The rules governing Section 16(a) reporting obligations and the related concepts can be complex and are best discussed with counsel. FPIs can reach out to the Paul Hastings team for additional resources to educate their teams and to discuss any questions.