SEC Grants Exemptive Relief from Section 16(a) Reporting to Officers and Directors of Certain FPIs

Following the adoption of final rules to require officers and directors of foreign private issuers to comply with Section 16(a) reporting, the US Securities and Exchange Commission has issued an exemptive order granting relief to such insiders of certain foreign private issuers.

As discussed in our December 23, 2025 and March 3, 2026 LawFlashes, the National Defense Authorization Act, signed into law on December 18, 2025,[1] included the Holding Foreign Insiders Accountable Act (HFIA Act), which 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 Section 12 of the Exchange Act on officers and directors of foreign private issuers (FPIs).

On February 27, 2026, the SEC adopted final rules to implement the statutory mandate of the HFIA Act, which will be effective March 18, 2026. While the HFIA Act provides the SEC with the authority to exempt any person, security, or transaction from Section 16(a) if it determines that the laws of a foreign jurisdiction apply substantially similar requirements, the Commission did not provide for such exemption in the February 27 adopting release for the final rules and instead indicated that it was actively evaluating whether it would exercise that authority.[2]

On March 5, the SEC issued exemptive relief (the Order) for officers and directors at certain FPIs from Section 16(a) reporting.[3] In the Order, the SEC limited exemptive relief to officers and directors of FPIs that are incorporated or organized in a “qualifying jurisdiction” and subject to a “qualifying regulation.” Specifically, the SEC identified the following “qualifying jurisdictions” in the Order: Canada, Chile, the European Economic Area, the Republic of Korea, Switzerland, and the United Kingdom.

For such jurisdictions, the SEC further identified the “qualifying regulations” that would require public reporting of insiders’ transactions in a company’s securities with substantially similar requirements to Section 16(a). In making the substantially similar assessment, the SEC focused on the following criteria: (1) the nature and type of insiders, securities, transactions, and  reports covered by such regulations and (2) the timing and public availability of such information.

The exemption is only available to directors or officers, as defined under Section 3(a)(7) and Rule 16a-1(f) of the Exchange Act, respectively, who report their transactions that would otherwise be subject to Section 16(a) under the qualifying regulation, and only if the report filed pursuant to that regulation is made available in English to the general public within no more than two business days after its public posting.

POSSIBILITY FOR ADDITIONAL ‘QUALIFYING’ JURISDICTIONS AND REGULATIONS

The SEC did not identify any jurisdictions or regulations that were not deemed “qualifying” for purposes of the exemptive relief, however, it did confirm that it may exercise its authority in the future to extend exemptive relief to other jurisdictions with regulations that are substantially similar to Section 16(a).

Conversely, it also noted that it could modify the Order in the future to address changes to the enumerated “qualifying regulations” that would result in such regulation no longer satisfying the substantially similar criteria discussed in the Order.

NEXT STEPS

Officers and directors at FPIs that are not incorporated or organized in one of the “qualifying jurisdictions” continue to be required to comply with Section 16(a) reporting starting on March 18 and should continue the necessary steps for compliance in earnest. 

FPIs that will be assisting such insiders with compliance should ensure that policy and procedures to provide assistance have been adopted and that the internal compliance teams are ready to begin making Section 16(a) filings for officers and directors later this month.