SEC Adopts Final Rules for Holding Foreign Insiders Accountable Act

The Securities and Exchange Commission (SEC) has adopted final rule and form amendments to implement the Holding Foreign Insiders Accountable Act (HFIA). These amendments revise Rule 3a12-3(b) to remove the current exemption from Section 16 for foreign private issuers (FPIs) and replace it with exemptions solely from Section 16(b) short-swing profit rules and Section 16(c) short selling prohibitions. Rule 16a-2 is also amended to exclude 10 percent holders from Section 16(a) reporting requirements. These changes aim to increase transparency regarding the holdings and transactions of directors and officers of FPIs.

Directors and officers of FPIs with registered equity securities must begin electronically filing Section 16 reports in English by March 18, 2026. This new requirement mandates disclosure of their holdings and transactions in the FPI's equity securities. Companies affected by this rule should ensure their directors and officers are aware of these new reporting obligations and have the necessary systems in place to comply with the electronic filing requirements by the specified deadline.