7 minute read | March.06.2026
SEC final rule amendments require Section 16 beneficial ownership reporting by directors and officers of foreign private issuers.
On February 27, 2026, the SEC adopted final rules implementing the Holding Foreign Insiders Accountable Act (the “HFIA Act”). For the first time, the amendments require that directors and officers of FPIs with a class of equity securities registered under Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”) disclose their beneficial ownership and transactions in the issuer’s equity securities by filing Section 16 reports on EDGAR, beginning March 18, 2026.
The rules are intended to increase transparency into trading by foreign insiders and to align their SEC reporting obligations more closely with those of U.S. public company insiders. In his statement, Commissioner Uyeda emphasized that the HFIA Act “levels the playing field for foreign private issuers that choose to voluntarily register their securities in the United States in order to take advantage of the liquidity and efficiencies of U.S. markets.”
The HFIA Act was enacted on December 18, 2025, as Section 8103 of the National Defense Authorization Act (Pub. L. No. 119-60). Prior to enactment, Exchange Act Rule 3a12-3(b) broadly exempted FPI-registered securities from all of Section 16, meaning directors and officers of FPIs had no reporting obligations under Section 16. The HFIA Act eliminated this exemption for directors and officers of FPIs, requiring disclosure of their beneficial ownership and transactions involving the company’s equity securities. While the amendments end the long‑standing blanket Section 16 exemption for FPIs, FPI insiders will remain exempt from the Section 16(b) short‑swing profit rules and Section 16(c) short‑sale prohibitions.
The statute mandated final regulations within 90 days of enactment, and the Commission adopted its final amendments on February 27, 2026 — more than two-and-a-half weeks ahead of the deadline. The Commission found notice-and-comment rulemaking unnecessary because the amendments conform existing rules to the HFIA Act’s requirements and involve limited agency discretion. The HFIA Act also granted the Commission exemptive authority to relieve any person, security or transaction from the new requirements where a foreign jurisdiction imposes substantially similar obligations (more on this below).
Beginning March 18, 2026, directors and officers of FPIs will be required to report their beneficial ownership and transactions in company equity securities. Such reporting is made through three forms which must be filed electronically through the SEC’s EDGAR system and must be in English:
Directors and officers of FPIs remain exempt from the short-swing profit disgorgement under Section 16(b) and short sale prohibitions under Section 16(c), though Exchange Act Section 10(b) and Rule 10b-5 anti-fraud provisions will continue to apply.
The final rules subject directors and officers of FPIs to Section 16(a) reporting:
Notably, the amendments do not extend reporting obligations to 10% shareholders of FPIs, an express exclusion from the amendments to Rule 16a-2, consistent with the scope of the HFIA Act. Commissioner Uyeda praised the Commission for implementing the “plain text of the statute” rather than adopting an expansive interpretation. He specifically approved the exclusion of 10% holders, describing this reading as “consistent with a plain reading of statutory amendments enacted by the HFIA Act” and supported by revisions from earlier, broader versions of the bill. Note, however, that 5% shareholders of FPIs are subject to beneficial ownership reporting on Schedule 13D or Schedule 13G, and these requirements remain unchanged by the SEC’s amendments to Section 16.
The HFIA Act gives the SEC authority to exempt, conditionally or unconditionally, any person, security or transaction, or any class thereof, from Section 16(a) reporting if the Commission determines that foreign law imposes substantially similar requirements. Chairman Atkins’ statement notes that the Staff is “actively evaluating whether it will recommend that the Commission exercise this exemptive authority” for jurisdictions with substantially similar reporting requirements.
For now, no exemptions have been granted, and all directors and officers of Section 12-registered FPIs should plan to comply fully with the requirements on March 18, 2026.
All reports must be filed electronically on EDGAR in XML format; filers may use a fillable web form that automatically converts disclosures to XML. Directors and officers who lack EDGAR access will need to submit a Form ID to obtain it. For FPIs with trading in both U.S. and non-U.S. markets, reporting persons should include both trading symbols in the applicable fields; where shares carry only a foreign symbol, filers may enter it in the mandatory trading symbol box or enter “none” and use the new optional foreign trading symbol field.
The Commission clarified that Transaction Codes in the Instructions for Forms 4 and 5 apply to FPI directors and officers notwithstanding their Section 16(b) exemption, and that Rule 16a-3(g)(1) and (f)(1) references to Section 16(b)-exempt transactions do not relieve them of Section 16(a) reporting obligations.
Immediate compliance deadline: FPIs should immediately identify all directors and officers subject to the new requirements; initial Form 3 reports are due by March 18, 2026. New filers without EDGAR access will need to submit a Form ID to obtain a CIK for impacted individuals promptly to avoid delays.
Ongoing reporting obligations: After the initial filing, Form 4 must be filed within two business days of any change in beneficial ownership, and Form 5 annually. FPIs should establish internal compliance procedures to monitor and track their directors’ and officers’ transactions.
On March 5, 2026, the SEC issued an exemptive order granting directors and officers of certain FPIs an exemption from the filing requirements of Section 16(a) of the Exchange Act.
The exemptive relief is available to directors and officers of an FPI that is either (i) incorporated or organized in a qualifying jurisdiction and subject to a qualifying regulation of the same jurisdiction or (ii) incorporated or organized in a qualifying jurisdiction but subject to a qualifying regulation of a different qualifying jurisdiction.
Qualifying Jurisdictions:
Qualifying Regulations:
Any director or officer seeking to rely on this exemption must report their transactions in their issuer’s securities as set forth under the qualifying regulation to which they are subject, and any report filed pursuant to a qualifying regulation must be made available in English to the general public within two business days of its public posting.