SEC Adopts Final Rules Requiring Section 16(a) Reporting by Foreign Private Issuer Executive Officers and Directors

The US Securities and Exchange Commission adopted final rules on February 27, 2026 to implement the Holding Foreign Insiders Accountable Act and conform its rules and forms within the statutory guidelines established by Congress.

As discussed in our December 23, 2025 LawFlash, the National Defense Authorization Act that was signed into law on December 18, 2025 [1] included the Holding Foreign Insiders Accountable Act (HFIA Act). The HFIA Act expanded the scope of Section 16(a) of the Securities Exchange Act of 1934, as amended (Exchange Act), to impose the obligation to file Forms 3, 4, and 5 to report holdings of and transactions in equity securities registered under the Section 12 of the Exchange Act on executive officers and directors of foreign private issuers (FPIs), effective March 18, 2026.

The HFIA Act directed the US Securities and Exchange Commission (SEC) to issue final regulations to modify its extant rules and regulations to implement the HFIA Act, and on February 27, 2026, the SEC did just that, adopting final rules that will be effective March 18, 2026.

The final rules make the following revisions:

• Amend Rule 3a12-3(b) under the Exchange Act to limit the exemption from Section 16 available to FPIs to only Section 16(b) (which establishes liability for short-swing profits), and Section 16(c) (which establishes certain short sales prohibitions).
• Amend Rule 16a-2 under the Exchange Act to provide that beneficial owners of 10% or more of an FPI’s class of equity securities registered under Section 12 of the Exchange Act are not subject to Section 16(a)
• Make conforming and other technical amendments to Forms 3, 4, and 5 to allow foreign addresses and trading symbols for securities listed on non-US exchanges, and to the Instructions to Form 3 to clarify that only directors and executive officers of FPIs, and not 10% beneficial owners, are required to file Forms 3

The adopting release for the final rules notes that although executive officers and directors of FPIs remain exempt from Section 16(b), they should not view existing language in Rule 16a-3(g)(1), Rule 16a-3(f)(1), or in the Instructions to Forms 4 or 5 that permit the omission of transactions exempt from Section 16 as exempting them from reporting transactions in light of the new statutory mandate. It also provides that in addition to Forms 3, 4, and 5 being filed electronically and in English, as required by the HFIA Act, Forms 4 and 5 filed by such insiders of FPIs should use the same transaction codes as those filed by insiders of domestic companies.

As expected, the final rules also do not carve out “directors by deputization,” or persons who are considered directors for purposes of Section 16 because a director represents their interests. Rather, the adopting release notes that whether a person is a “director” of an FPI is a factual determination based on the definition in Section 3(a)(7) of the Exchange Act, which is “any director of a corporation or any person performing similar functions with respect to any organization, whether incorporated or unincorporated.” The final rules also did not expand beyond the statutory remit of the HFIA Act to extend Section 16(a) reporting requirements to 10% beneficial owners, a fact noted with approval by SEC Commissioner Mark T. Uyeda in his statement on the final rules, [2] despite the SEC having received petitions to do so. In this respect, the Commission’s strict adherence to the congressional directive may be a harbinger for future rulemakings by the agency.

Finally, the HFIA Act provides the SEC with the authority to exempt any person, security, or transaction from Section 16(a) if the SEC determines that the laws of a foreign jurisdiction apply substantially similar requirements to such person, security, or transaction. The adopting release notes that the SEC may choose to provide for such exemption in a future rulemaking or order, and SEC Chairman Paul S. Atkins stated that the SEC Staff was actively evaluating whether it would recommend exercise of that authority in his statement on the final rules. [3]

NEXT STEPS FOR COMPLIANCE

Many domestic public companies assist their executive officers and directors with compliance for Section 16(a) reporting. To the extent they have not yet done so, FPIs should consider whether they will similarly assist their officers and directors with compliance, and if so, adopt policies and procedures for compliance implementation. As part of this exercise, FPIs and their officers and directors should ensure that such necessary administrative tasks, such as obtaining EDGAR Next filing codes and ensuring appropriate delegations to filing agents, are either in progress or complete at this time.

In addition, FPIs should begin assisting their officers and directors with the preparation of their initial reports on Form 3, which will include both direct and indirect holdings, such as those held by spouses or minor children, and establish protocols to monitor transactions by such individuals and their family members or other related parties to ensure timely and accurate reporting of transactions going forward.