As of March 18, 2026, directors and officers of a foreign private issuer (FPI) with a class of equity securities registered under Section 12 of the Securities Exchange Act of 1934 were required to begin filing Section 16(a) reports with the SEC. This change stems from the National Defense Authorization Act for Fiscal Year 2026 (NDAA 2026), which includes the Holding Foreign Insiders Accountable Act (HFIAA), enacted on December 18, 2025.
This new Exchange Act section introduces expanded Section 16(a) reporting obligations for global issuers and establishes new Section 16 foreign private issuer reporting standards that significantly impact corporate governance for foreign companies.
It marks the first time Section 16 reporting requirements have been extended to foreign companies. Historically, these obligations applied only to insiders of a domestic issuer. Now, each insider at a foreign issuer must evaluate their reporting responsibilities under U.S. securities laws.
The March 18, 2026 effective date created a short implementation window. FPIs were required to quickly understand their obligations, identify covered individuals, and prepare for new reporting workflows tied to both equity security and reportable security.
What Has Changed Under the New Law?
The core regulatory shift is the extension of Section 16(a) to directors and executive officers of FPIs. These individuals must now report beneficial ownership and transactions involving an equity security of the issuer through EDGAR filings.
This change introduced a new Section 16 reporting obligation but does not fully align FPIs with domestic issuer requirements. Directors and officers, each potentially an FPI insider, must comply with reporting obligations under this exchange act rule.
- Importantly, certain provisions remain unchanged:
- Section 16(b) short-swing profit liability does not apply
- Section 16(c) short sale restrictions do not apply
This narrower scope is a key distinction between FPIs and domestic companies under this exchange act section.
Who Must Report Under the New Section 16(a) Rules?
The new rules apply to directors and officers, including those who perform policy-making functions, of a foreign issuer with securities registered under Section 12(b) or Section 12(g) of the Exchange Act.
The definition of “officer” includes individuals who perform policy-making functions. This typically includes executive officers identified in Form 20-F, as well as principal financial officers and principal accounting officers or controllers.
A director is not limited to formally elected board members. A FPI director may also include individuals or entities acting as directors by deputization, meaning they exercise influence through a designated representative.
In contrast, beneficial owners of more than 10% of an issuer’s equity securities are generally not subject to Section 16(a) reporting solely due to ownership. However, if such an individual qualifies as a director by deputization, they may still be considered an FPI insider.
Required Section 16 Filings for FPIs
The required filings mirror those used by insiders of domestic issuers and are governed under both the Securities Act and the Exchange Act. These filings include:
Form 3
The initial statement of beneficial ownership.
- Was due by March 18, 2026 for existing directors and officers
- Is due within 10 days of appointment for new filers
- For IPOs after March 18, 2026, filing is required upon effectiveness
Form 4
Reports changes in beneficial ownership.
- Due within two business days of the transaction
Form 5
Annual statement for certain deferred or previously unreported transactions.
- Due 45 days after fiscal year-end
For a deeper overview, DFIN’s guide to Section 16 filing forms explains how these filings work together.
EDGAR Filing and Operational Requirements
All Section 16 reporting must be submitted through EDGAR. Many directors and officers of foreign companies needed to obtain access credentials for the first time.
This process may include:
- Form ID submission
- Notarization requirements
- Enrollment in EDGAR Next
Issuers often play a central role in supporting filings by coordinating data collection, preparing forms, and managing submission workflows. Establishing a structured reporting process is critical to ensure timely compliance.
Jurisdiction-Specific Exemptions: What We Know (and Don’t Know)
The SEC has issued an Exemption Order that provides defined relief from Section 16(a) reporting obligations for certain directors and officers of foreign private issuers. This relief applies when specific jurisdictional and regulatory criteria are met.
Under the order, directors and officers may be exempt from Section 16(a) reporting if the FPI meets both of the following conditions:
- The company is incorporated or organized in a qualifying jurisdiction
- The company is subject to a qualifying regulatory regime that imposes comparable insider reporting requirements
The qualifying regulation does not need to come from the same jurisdiction in which the issuer is incorporated. The exemption may still apply if the company is incorporated in one qualifying jurisdiction but subject to a different qualifying regulatory framework recognized by the SEC.
The SEC has identified the following as qualifying jurisdictions:
- Canada
- Chile
- The European Economic Area
- The Republic of Korea
- Switzerland
- The United Kingdom
This exemption is intended to reduce duplicative reporting requirements where comparable disclosure frameworks already exist. However, eligibility must be evaluated carefully based on both jurisdiction and applicable regulatory obligations.
- Companies that do not meet these criteria, or that are uncertain about their status, should assume that full Section 16(a) compliance is required and proceed accordingly.
Key relief measures include:
- A no-action position allowing filings to be made by April 1, 2026, for individuals who submitted Form ID applications before March 18, 2026, but had not yet received EDGAR access.
- An extension to April 20, 2026, for certain companies impacted by the Iran-related conflict.
In addition to the Exemption Order, the SEC released seven FAQs providing interpretive guidance and limited administrative relief to support implementation of the HFIA Act requirements. These FAQs clarify filing expectations and address practical challenges faced by first-time filers under Section 16(a).
These updates provide targeted flexibility but do not eliminate the need for broader compliance readiness. For most FPIs, preparation and implementation of Section 16 reporting processes remain essential.
Immediate Action Items for FPIs
To support compliance following the March 18, 2026, effective date, FPIs should focus on the following steps:
- Identify covered officers and directors
- Obtain and verify EDGAR access credentials
- Map direct and indirect beneficial ownership of each security
- Establish internal Section 16 reporting workflows
- Update insider trading policies and pre-clearance procedures
- Train directors and officers on reporting obligations
- Coordinate with U.S. securities counsel and service providers
These steps are essential for building a repeatable and compliant reporting process.
Consequences of Non-Compliance
Late or missed filings are violations attributed to the individual insider responsible for filing. However, they can also lead to broader scrutiny for the issuer.
The SEC has historically focused on enforcement related to untimely filings. As a result, both individuals and issuers may face regulatory attention.
Potential consequences include:
- Enforcement actions
- Reputational risk
- Increased regulatory scrutiny
The SEC also has authority to seek equitable relief for violations, reinforcing the importance of timely and accurate reporting.
How FPIs Can Prepare for a New Section 16 Reality
As of March 18, 2026, Section 16(a) compliance is now a reality for every foreign issuer with registered securities in the United States. While initial deadlines have passed, ongoing compliance remains critical. The combination of new reporting obligations, tight timelines, and operational complexity means companies must maintain disciplined processes moving forward.
Monitoring SEC guidance and refining internal processes will be essential as implementation evolves.
For many organizations, leveraging Section 16 reporting software can help streamline filings, support EDGAR submissions, and reduce execution risk across the reporting cycle. At DFIN, we support FPIs through this transition with purpose-built solutions and experienced teams that help simplify form preparation, coordinate EDGAR Next requirements, and create more efficient, repeatable reporting workflows.
