The Securities and Exchange Commission adopted final rules and form amendments to reflect the requirements of the recently enacted Holding Foreign Insiders Accountable Act (HFIA), which will increase transparency into the holdings and transactions of directors and officers of foreign private issues (FPIs). Directors and officers of FPIs with a class of equity securities registered under Section 12 of the Securities Exchange Act of 1934 (Exchange Act) must begin disclosing their holdings and transactions in the FPI’s equity securities on March 18, 2026, the effective date of the HFIA Act.
The HFIA Act, enacted on Dec.18, 2025, amended Section 16(a) of the Exchange Act to require every person who is a director or an officer of an Exchange Act reporting FPI (but not “10 percent holders” who beneficially own more than 10 percent of any class of equity securities of such FPIs) to file Section 16 reports electronically and in English. The HFIA Act mandates that the Commission issue final regulations (or amend or rescind existing regulations in whole or in part) to carry out the amendments made by the HFIA Act no later than 90 days after the date of enactment.
The SEC’s final rule amendments revise the following rules and forms to reflect the changes made by the HFIA Act:
- Rule 3a12-3(b) to remove the current exemption from Section 16 in its entirety and replace it with exemptions from Section 16(b) short-swing profit rules and Section 16(c) short selling prohibition only
- Rule 16a-2, which identifies persons and transactions subject to Section 16, to exclude 10 percent holders of FPIs’ equity securities from the requirements of Section 16(a) and related rules
- Section 16 reports
The SEC, however, provides a conditional exemption from Section 16(a) reporting requirements for certain directors and officers of foreign private issues (FPIs). This relief, granted through an exemptive order on March 5, 2026, is designed to prevent duplicative reporting for insiders already subject to “substantially similar” regulations in their home jurisdictions. To qualify for this exemption, both the issuer and the individual insider must meet specific criteria:
- The FPI must be incorporated or organized in one of the following Jurisdictions:
- Canada
- Chile
- European Economic Area (EEA)
- Republic of Korea
- Switzerland
- United Kingdom
- The FPI must be subject to a designated “qualifying regulation” (e.g., EU Market Abuse Regulation or UK MAR).
- Individual Reporting Requirement: The specific director or officer must be personally required to report their transactions under that foreign regulation.
- English Disclosure: Any reports filed under the foreign regulation must be made available to the public in English within two business days of the original posting.
