SEC Adopts Section 16 Reporting Rules for Foreign Private Issuers

JD Supra Trade Law

Published February 27th, 2026

Detected March 10th, 2026

Summary

The SEC adopted final amendments requiring directors, officers, and 10% owners of foreign private issuers (FPIs) to file beneficial ownership reports on Forms 3, 4, and 5, effective March 18, 2026. The SEC also issued an order granting conditional exemptive relief for certain FPIs subject to substantially similar local reporting rules.

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What changed

The Securities and Exchange Commission (SEC) has adopted final rules implementing the Holding Foreign Insiders Accountable Act (HFIAA), which mandates that directors and officers of foreign private issuers (FPIs) must now file beneficial ownership reports on Forms 3, 4, and 5, effective March 18, 2026. This action amends existing rules and forms to align with the HFIAA's removal of the longstanding exemption for FPI insiders. Notably, while Section 16(a) reporting obligations now apply to FPI insiders, the short-swing profit rules under Section 16(b) and short sale prohibitions under Section 16(c) will not apply to them. Additionally, 10% beneficial owners of FPIs who are not officers or directors remain exempt from Section 16 entirely.

Concurrently, the SEC issued an exemptive order providing conditional relief from these new reporting requirements for FPIs incorporated or organized in qualifying jurisdictions (Canada, EEA, South Korea, Switzerland, UK) that are subject to "substantially similar" local reporting rules. To qualify for the exemption, FPIs must ensure that their directors and officers report transactions under the applicable qualifying regulation, and these reports must be made publicly available in English within two business days of posting. Compliance with the new reporting requirements is mandatory for most FPI insiders by March 18, 2026, unless they qualify for the specific exemptive relief. Failure to comply could result in SEC enforcement actions.

What to do next

Review applicability of new Section 16 reporting requirements for foreign private issuers.
Determine if the company qualifies for the SEC's exemptive relief based on home country reporting obligations.
Ensure timely filing of Forms 3, 4, and 5 by March 18, 2026, if not exempt.

Penalties

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Source document (simplified)

March 9, 2026

SEC Adopts Rules for Section 16 Reporting by Foreign Private Issuers and Grants Limited Exemptive Relief to Certain Filers

Ryan Adams, Scott Lesmes, Sydney Stancik Morrison & Foerster LLP + Follow Contact LinkedIn Facebook X Send Embed

On February 27, 2026, the Securities and Exchange Commission (SEC) adopted final amendments to implement the Holding Foreign Insiders Accountable Act (HFIAA), which amended Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) to require directors and officers of foreign private issuers (FPIs) to file beneficial ownership reports on Forms 3, 4, and 5 beginning March 18, 2026. [1] Shortly after adopting the rules, on March 5, 2026, the SEC issued an order granting conditional exemptive relief from the new requirements for certain companies that are already subject to local reporting rules. [2]

Both of these developments are discussed below.

Adoption of Implementing Rules

As discussed in our earlier client alert, HFIAA amended Section 16(a) of the Exchange Act to eliminate the longstanding exemption for directors and officers of FPIs from Section 16 reporting. Specifically, the SEC adopted amendments to Rule 3a12-3(b), Rule 16a-2, and Forms 3, 4, and 5 to conform these rules and forms to HFIAA. The final amendments reflect that directors and officers of FPIs must file:

An initial statement of beneficial ownership on Form 3;
Statements of changes in beneficial ownership on Form 4; and
Annual statements on Form 5, as applicable. Consistent with HFIAA, the SEC also clarified that 10% beneficial owners of FPIs (that are not officers or directors) will be exempt from Section 16 in its entirety, including Section 16(a) reporting obligations.

In addition, FPI insiders will be subject only to the reporting requirements under Section 16(a). The short-swing profit rules under Section 16(b) and short sale prohibitions under Section 16(c) will not apply to FPI insiders.

Exemptive Order for Certain FPIs

While FPI insiders generally are subject to the new Section 16(a)(5) of the Exchange Act, the SEC provided a limited exemption from Section 16 reporting where the laws of a foreign jurisdiction impose “substantially similar” requirements. The SEC’s order exempts directors and officers of an FPI that is incorporated or organized in a “qualifying jurisdiction” and where the FPI is either subject to a specified “qualifying regulation” of the same jurisdiction or of a different qualifying jurisdiction, provided the company makes the home country reports publicly available in English within two business days of public posting.

Qualifying Jurisdictions

The SEC’s order deemed the following jurisdictions as qualifying jurisdictions:

Canada
Chile
European Economic Area
Republic of Korea
Switzerland
United Kingdom

Conditions to the Exemption

The exemption is subject to two principal conditions:

The director or officer must report transactions in the issuer’s securities pursuant to the applicable qualifying regulation; and
Reports filed under the qualifying regulation must be made publicly available in English within no more than two business days of public posting. The SEC noted that it may extend similar relief to additional jurisdictions in future exemptive orders if it determines that their laws impose substantially similar reporting requirements.

Key Takeaways

Beginning March 18, 2026, directors and officers of FPIs with a class of equity securities registered under Section 12 of the Exchange Act are required to file Forms 3, 4, and 5, unless an exemption applies.

For FPIs incorporated or organized in the qualifying jurisdictions and subject to the qualifying regulations, directors and officers will not be required to file Forms 3, 4, or 5 with the SEC, provided the conditions are satisfied.

FPIs incorporated outside these jurisdictions, or whose directors and officers are not subject to a qualifying regulation, remain subject to the new Section 16 reporting requirements, beginning March 18, 2026.

[1] Holding Foreign Insiders Accountable Act Disclosure (February 27, 2026).

[2] Order Granting Directors and Officers of Certain Foreign Private Issuers an Exemption from the Filing Requirements of Section 16(a) of the Exchange Act (March 5, 2026).

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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