Section 16 Reporting Begins March 18 for FPI Directors and Officers
On February 27, 2026, the U.S. Securities and Exchange Commission (SEC or Commission) announced that it adopted final rule and form amendments implementing the Holding Foreign Insiders Accountable Act (the HFIA Act). The HFIA Act, enacted on December 18, 2025,1 marks a significant change in the U.S. disclosure framework for foreign private issuers (FPIs)2 and—most directly—to their directors and officers.3
Beginning March 18, 2026, directors and officers of FPIs with a class of equity securities registered under Section 12 of the Securities Exchange Act of 1934 (Exchange Act) will, for the first time, be required to comply with Section 16(a) insider reporting obligations. The following must be filed electronically on EDGAR in English:
- initial ownership reports on Form 3 within 10 days of becoming an insider;
- changes in beneficial ownership (e.g., purchase, sale, gift, grant, exercise) on Form 4 within two business days; and
- annual Form 5 reports (for missed or deferred filings) within 45 days after fiscal year-end.
From Longstanding Exemption to Mandatory Insider Reporting
Historically, directors and officers of FPIs were exempt from Section 16. Exchange Act Rule 3a12-3(b) effectively removed classes of securities registered by FPIs from Section 16 altogether. As a result, FPI insiders were not required to report their holdings or transactions on a near-real-time basis. Instead, disclosure of insider ownership and trading activity was largely governed by home-country law and by the aggregate executive compensation and ownership disclosures in Form 20-F.
The HFIA Act modified the longstanding approach to ownership and transaction reporting by FPIs, by amending Section 16(a) to require every director and officer of an FPI to file beneficial ownership reports with the SEC. Congress also directed the SEC to adopt final implementing rules within 90 days of enactment. The Commission’s adoption of final rules on February 27, 2026, satisfies that mandate, with the rules taking effect on the same date as the statutory amendments—March 18, 2026.
What the Final Rules Do—and Do Not—Change
The final rules are largely conforming in nature to the HFIA Act, but they are nonetheless critical to understand because they define the precise contours of the new Section 16 regime for FPIs.
Section 16(a) Applies; Exemptions from Sections 16(b) and 16(c) Remain. The SEC amended Rule 3a12-3(b) to remove the blanket exemption from Section 16 for FPIs, and replaced it with targeted exemptions from Section 16(b) (the short-swing profit disgorgement provision) and Section 16(c) (the short-sale prohibition).4 As a result, directors and officers of FPIs with a class of equity securities registered under Section 12 of the Exchange Act will be subject to Section 16(a) reporting but will remain outside the short-swing liability and short-sale regimes. The adopting release is explicit on this point, confirming that the “HFIA Act did not amend Section 16(b) or Section 16(c), which provisions, accordingly, remain inapplicable to Section 16 reporting persons of FPIs.”
Only Directors and Officers Covered; 10 Percent Holders Excluded. The SEC also amended Rule 16a-2, which identifies persons subject to Section 16, to make clear that 10 percent holders of FPIs are excluded from Section 16(a) reporting and related rules unless they are also directors or officers. In the adopting release, the Commission explained that this outcome reflects both the plain text of the HFIA Act and its legislative history. It also noted that earlier versions of the legislation would have swept more broadly, but Congress ultimately chose to limit the amendment to directors and officers.5
No Annual Report Disclosure of Section 16 Noncompliance. Domestic issuers are required to disclose Section 16(a) filing delinquencies in their annual reports or proxy statements.6 The adopting release confirms that this disclosure requirement will not extend to FPIs, stating that “[n]either the HFIA Act nor the Commission rules include a requirement for FPIs to disclose non-compliance with Section 16(a) filing requirements by directors and officers.”
Updates to Forms 3, 4, and 5. In addition to the above, the Commission amended Forms 3, 4, and 5 and their instructions to reflect the new population of filers. These changes include updates to Form 3 instructions to expressly cover FPI directors and officers while excluding 10 percent holders of FPIs, as well as a number of technical and practical accommodations for foreign filers. Notably, the forms now include optional fields for a foreign trading symbol, a postal code, and a country code as part of the address of the reporting person, reflecting the SEC’s expectation of an increase in filings by individuals located outside the U.S.
Chairman Atkins’s Statement and the Possibility of Future Exemptions
In his statement accompanying adoption of the final rules, SEC Chairman Paul S. Atkins underscored that Congress authorized the SEC to provide exemptions from Section 16(a) reporting where foreign laws impose substantially similar insider disclosure requirements. According to Chairman Atkins, SEC staff are actively evaluating whether to recommend that the Commission exercise this exemptive authority. For now, however, the Commission has not provided any exemptions. FPIs should assume full compliance will be required beginning March 18, 2026, unless and until the SEC acts through a future rulemaking or exemptive order.
Practical Implications for FPIs, Directors, and Officers
Section 16(a) reporting is highly time-sensitive, with most reportable transactions required to be disclosed on Form 4 within two business days. FPIs should begin by carefully identifying which individuals qualify as “directors” and “officers” for Section 16 purposes, applying U.S. definitions rather than home-country concepts or Form 20-F disclosure practices.
Companies should also ensure that each covered director and officer has the necessary EDGAR credentials for filing the reports, that appropriate powers of attorney are in place, and that internal or external resources are prepared to draft and file Forms 3, 4, and 5 on very short notice. Coordination with brokers, equity plan administrators, and internal legal and compliance teams will be essential, particularly given time-zone differences and the possibility of trading in multiple markets. Companies should consider updating policies and procedures to reflect the new requirements.
Finally, while FPIs remain exempt from Section 16(b) and Section 16(c), the visibility created by real-time Form 4 reporting should not be overlooked. Insider transactions that were previously disclosed publicly, if at all, under home-country regimes or in periodic filings will now be publicly available on EDGAR within two business days following the transaction.7 This change has potential implications for investor relations, governance optics, and internal trading and blackout policies.
FPIs should act now to identify individuals who will be subject to Section 16(a) reporting, establish filing processes, and educate directors and officers about their new obligations. The process to obtain EDGAR credentials can be lengthy, so FPIs should initiate the process immediately if they have not done so already. Although future exemptive relief remains a possibility for certain jurisdictions, the final rules are in place, the effective date is fixed, and the compliance clock is already running.
For more information, please contact any member of the firm’s Public Company Representation practice.
[1] The HFIA Act was part of the National Defense Authorization Act for Fiscal Year 2026 (P.L. 119-60).
[2] The HFIA Act applies to foreign private issuers, as such term is defined in Exchange Act Rule 3b-4.
[3] For more information on the HFIA Act, please see our previous client alert.
[4] Please note that this discussion is limited to Section 16; Exchange Act Rule 3a-12-3(b) continues to include exemptions from Exchange Act Sections 14(a), 14(b), 14(c), and 14(f), for securities registered by an FPI.
[5] See footnote 11 of the adopting release.
[6] See Regulation S-K Item 405.
[7] Given the short timeframe for filing Section 16 reports after transactions occur, filers have until 10:00 p.m. ET to file these reports when due, as compared to the typical 5:30 p.m. ET filing deadline for other reports, such as annual reports on Form 20-F. See Regulation S-T Rule 13(a)(4).
