Introduction

Section 16(a) of the U.S. Securities Exchange Act of 1934 (the “Act”) requires directors, officers, and persons owning more than 10 percent of any class of equity securities registered under Section 12 of the Act (“10% Holders”) to disclose their holdings of, and transactions in, the issuer’s equity securities through filings with the U.S. Securities and Exchange Commission (the “SEC”) known as “Section 16 reports.” Directors and officers of “foreign private issuers” (“FPIs”), within the meaning of the Act, have historically been exempt from filing Section 16 reports.

“Foreign Private Issuer” Defined

Rule 3b-4 under the Act contains the official definition of an FPI. In the first instance, an issuer qualifies as a “foreign issuer” if it is incorporated or organized under the laws of a foreign country and is not a foreign government or political subdivision.

Once determined to be a foreign issuer, it will meet the definition of an FPI if no more than 50% of its outstanding voting securities are held of record by U.S. residents (looking through brokers, dealers and banks acting as intermediaries or nominees). If this condition is failed, a foreign issuer can still qualify as an FPI if it avoids each of the following U.S. connections:

• A majority of the issuer’s officers or directors are U.S. citizens or residents.
• More than 50 percent of the issuer’s assets are located in the United States.
• The issuer’s business is administered principally in the United States.

The Holding Foreign Insiders Accountable Act (“HFIA”)

In December of 2025, the U.S. Congress enacted HFIA, which amended Section 16(a) of the Act to require every director or officer of an FPI (but not 10% Holders of FPIs) to file Section 16 reports electronically and in English, effective 18 March 2026. HFIA requires the SEC to issue final regulations (or amend or rescind existing regulations in whole or in part) to carry out the amendments made by HFIA, no later than 90 days after the date of enactment.

SEC Adopting Release

The SEC has amended certain of its rules and forms under the Act to reflect the requirements of HFIA:

• Consistent with the statute, the SEC amended its regulation exempting directors and officers of FPIs from Section 16 compliance to limit the exemption to the Section 16(b) short-swing profits rules and the Section 16(c) short-selling prohibition.
• The SEC amended its rule identifying persons and transactions subject to Section 16 to exclude 10% Holders in FPIs from the requirements of Section 16(a).
• The SEC amended the Section 16 report forms (Forms 3, 4, and 5) to reflect the changes made by HFIA. The General Instructions were modified to include directors and officers of FPIs, and to exclude 10% Holders of FPIs, from the requirement to file the Forms. Technical amendments to each of the Section 16 reports were also made to include an optional field for a foreign trading symbol and a country code as part of the address of the reporting person and to update certain SEC contact information.

Conclusion

Local advisers to FPIs should reach out to individuals serving as officers or directors of such companies to ensure that they are aware of the Section 16 requirements that no apply to them for the first time.