SEC Adopts Final Rules Requiring Section 16(a) Reporting for Directors and Officers of FPIs, and Provides Exemptive Relief for FPI Directors and Officers in Qualifying Jurisdictions

Executive Summary

• What happened? On February 27, 2026, the U.S. Securities and Exchange Commission (SEC) adopted final rules implementing the Holding Foreign Insiders Accountable Act (HFIA Act), extending Section 16(a) reporting requirements to directors and officers of foreign private issuers (FPIs) with equity securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (Exchange Act). The rules take effect March 18, 2026.
• What’s required? Covered individuals must file Forms 3, 4 and 5 via EDGAR. Beneficial owners of greater than 10% of the outstanding shares of FPIs are not subject to the new Section 16(a) requirements, and FPI directors and officers remain exempt from Section 16(b)’s short-swing profit liability and Section 16(c)’s short sale restrictions.
• Is there relief? On March 5, 2026, the SEC issued an exemptive order granting relief for directors and officers of FPIs in certain qualifying jurisdictions—including Canada, Chile, the European Economic Area, the Republic of Korea, Switzerland and the United Kingdom—provided the directors or officers comply with substantially similar home-jurisdiction reporting requirements and make filings publicly available in English within two business days.
• What should you do now? FPIs that cannot rely on the exemptive relief should act immediately to identify covered officers, obtain EDGAR filing codes, map beneficial ownership and establish reporting infrastructure ahead of the March 18, 2026 deadline.

On February 27, 2026, the SEC adopted final amendments to its rules and forms under the Exchange Act to implement the HFIA Act. As we discussed in our December 2025 alert, the HFIA Act was enacted on December 18, 2025, as part of the National Defense Authorization Act for Fiscal Year 2026. The final rules become effective on March 18, 2026, requiring immediate compliance by affected FPI directors and officers. In addition, on March 5, 2026, the SEC issued an exemptive order granting relief from Section 16(a) reporting for directors and officers of FPIs in certain qualifying jurisdictions that are subject to regulations that apply substantially similar reporting requirements as Section 16(a). Further, on March 9, 2026, the SEC staff published FAQs providing additional guidance on filing requirements and deadlines for directors and officers of FPIs preparing for their first Section 16(a) filings.

Key Takeaways

The SEC’s final rules reflect a largely straightforward implementation of the statutory mandate:

• Directors and officers of FPIs with equity securities registered under Section 12 of the Exchange Act will be subject to Section 16(a) reporting requirements from March 18, 2026.
• Required filings include Forms 3, 4 and 5 on the SEC’s EDGAR system, which requires enrollment on EDGAR Next.
• The SEC confirmed that beneficial owners of greater than 10% of the outstanding shares of FPIs are not subject to the new Section 16(a) requirements.
• Directors and officers of FPIs remain exempt from Section 16(b)’s short-swing profit liability and Section 16(c)’s short sale restrictions.

The SEC also provided several important clarifications:

• FPI directors and officers must report all transactions required by Section 16(a), even though certain rules and form instructions reference transactions “not exempt from section 16(b)”—language that should not be interpreted as exempting FPI directors and officers from reporting.
• The Transaction Codes listed in the Instructions for Forms 4 and 5 also apply to transactions of directors and officers of FPIs, notwithstanding their exemption from Section 16(b).
• For FPIs with two-tier board structures (comprising a supervisory board and a management board), whether a person is a “director” for purposes of Section 16(a) is a factual determination based on the Exchange Act Section 3(a)(7) definition, which includes any person performing similar functions to a director.

Filing Requirements and Deadlines

As clarified in the SEC staff’s FAQs, all Section 16(a) filings must be made via EDGAR and must be submitted and accepted by 10:00 p.m. ET in order to be timely filed.

Form 3 (Initial Statement of Beneficial Ownership). The SEC staff’s FAQs clarify that for persons serving as directors or officers of an FPI as of December 18, 2025, a Form 3 must be filed on March 18, 2026; however, if the person is no longer a director or officer as of March 18, 2026, no Form 3 filing is required. The FAQs further clarify that for persons who become directors or officers of FPIs after December 18, 2025, but before March 18, 2026, the Form 3 is due by the later of March 18, 2026, or 10 days after becoming a director or officer. Similarly, the FAQs address FPIs that register a class of equity securities under Section 12 for the first time between December 18, 2025 and March 18, 2026: if a person was already a director or officer as of the date of effectiveness of the registration statement, the Form 3 is due on March 18, 2026, and if a person became a director or officer after the effective date of the registration statement, the Form 3 is due by the later of March 18, 2026, or 10 days after becoming a director or officer. After March 18, 2026, directors and officers of FPIs must file a Form 3 within 10 days after becoming a director or officer or, in the case of an initial public offering, at the time of the effectiveness of the Exchange Act registration statement.

Form 4 (Statement of Changes in Beneficial Ownership). A Form 4 must be filed before the end of the second business day following any transaction in the FPI’s equity securities, including purchases, sales, gifts, equity compensation grants and certain transactions in derivative securities. The SEC staff’s FAQs clarify that directors and officers of FPIs that had a class of equity securities registered under Section 12 of the Exchange Act prior to March 18, 2026, are not required under Rule 16a-2(a) to report on their first Form 4 certain transactions effected prior to March 18, 2026. However, if an FPI registers a class of equity securities under Section 12 on or after March 18, 2026, Rule 16a-2(a) would require its directors and officers to report certain transactions effected prior to March 18, 2026, on their first Form 4 if such transactions occurred within six months prior to the director or officer becoming subject to Section 16(a) solely as a result of the issuer registering a class of equity securities pursuant to Section 12.

Form 5 (Annual Statement). Form 5 may be required to be filed within 45 days after the FPI’s fiscal year end to report certain transactions eligible for deferred reporting.

Consequences of Non-Compliance

Late or missing Section 16 filings constitute violations of securities laws by the individual responsible for filing, and the SEC retains broad enforcement authority to seek remedies. The SEC has periodically focused on untimely filings, announcing enforcement actions against individuals and affiliated companies for failure to timely file Section 16 reports.

Unlike domestic issuers subject to Item 405 of Regulation S-K, the SEC did not impose any requirement for FPIs to disclose noncompliance with Section 16(a) filing requirements by directors and officers in their annual reports.

SEC Exemptive Order for Qualifying Jurisdictions

On March 5, 2026, the SEC issued an exemptive order pursuant to Section 16(a)(5) of the Exchange Act (as added by the HFIA Act) exempting directors and officers of certain FPIs from Section 16(a) reporting requirements where the SEC has determined that the laws of the FPI’s home jurisdiction impose substantially similar requirements. The qualifying jurisdictions are Canada, Chile, the European Economic Area (including the 27 European Union member states plus Iceland, Liechtenstein and Norway), the Republic of Korea, Switzerland and the United Kingdom. For each jurisdiction, the SEC identified a corresponding qualifying regulation with substantially similar insider reporting requirements. The exemption is available where an FPI is either (1) incorporated or organized in a qualifying jurisdiction and subject to a qualifying regulation of the same jurisdiction or (2) incorporated or organized in a qualifying jurisdiction but subject to a qualifying regulation of a different qualifying jurisdiction.

The exemptive relief is subject to two conditions: (1) the director or officer must report transactions in the issuer’s securities as required under the applicable qualifying regulation, and (2) any report filed pursuant to a qualifying regulation must be made available in English to the general public within two business days of its public posting, whether through the regulator’s or listing venue’s online database or, if that is not possible, on the company website. The SEC indicated that it may extend exemptive relief to additional jurisdictions in separate future orders.

Recommended Action Items

As we noted in our December 2025 alert, FPIs and their directors and officers face an imminent compliance deadline. FPIs incorporated or organized in a qualifying jurisdiction and subject to a qualifying regulation should assess whether they are eligible to rely on the SEC’s exemptive order, and if so, should confirm that they satisfy both conditions described above. FPIs that are not incorporated or organized in a qualifying jurisdiction, or that are not subject to a qualifying regulation, remain subject to Section 16(a) reporting requirements and should take the following immediate actions to the extent not already completed:

• Identify Covered Officers. FPIs must determine which individuals qualify as “officers” under SEC rules. Particular attention should be paid to the principal accounting officer or controller, who may not typically be considered an executive officer internally but will still be subject to reporting requirements.
• Obtain EDGAR Filing Codes. Directors and officers need SEC login codes to file on EDGAR, requiring notarized Form ID applications that can take several weeks. Individuals with prior EDGAR access should verify they can still access the upgraded EDGAR Next system.
• Map Beneficial Ownership. Companies should work with directors and officers to identify all direct and indirect holdings, including securities held through family members, trusts, partnerships or other entities. Determining beneficial ownership can be complex and time-consuming, particularly where holdings are indirect.
• Establish Reporting Infrastructure. While filing obligations rest with individual insiders, companies typically handle the procurement of EDGAR codes, form preparation and filing mechanics for directors and executive officers. Companies should determine whether to handle Section 16(a) reporting in-house or engage financial printers and external counsel.
• Update Policies and Procedures. FPIs should consider implementing preclearance procedures to allow adequate time for Form 4 preparation and filing within the two-business-day deadline.
• Provide Training. Directors and officers need education on reporting obligations, U.S. securities law concepts such as beneficial ownership and pecuniary interest, transaction types requiring reporting, filing deadlines and EDGAR procedures.

Companies should coordinate with U.S. securities counsel to ensure transactions and shareholdings are reported correctly.

Conclusion

With the March 18, 2026 effective date rapidly approaching, FPIs and their directors and officers should take immediate steps to assess their compliance obligations. FPIs in qualifying jurisdictions and subject to qualifying regulations should evaluate whether they can rely on the SEC’s exemptive order and confirm that the conditions for reliance are satisfied, including the English-language reporting requirement. FPIs that are not incorporated or organized in a qualifying jurisdiction or not subject to a qualifying regulation should proceed without delay to identify covered officers, obtain EDGAR filing codes, and establish reporting infrastructure. Given the time necessary to complete these steps, companies should begin preparations immediately and consult with U.S. securities counsel.