Beginning on March 18, 2026, directors and officers of foreign private issuers (“FPIs”) with equity securities registered under the Securities Exchange Act of 1934 (the “Exchange Act”) will be required to publicly file reports under Section 16(a) of the Exchange Act. These reports are the same as those long required for officers and directors of domestic issuers. This new requirement is mandated by the “Holding Foreign Insiders Accountable Act” (the “HFIAA”), a small section of the much larger and wide-ranging National Defense Authorization Act for Fiscal Year 2026.
The HFIAA grants the Securities and Exchange Commission (the “SEC”) the authority to grant individual or class-based exemptions from its requirements if the SEC determines that the laws of a foreign jurisdiction apply substantially similar requirements. Until and unless the SEC exercises that exemption authority, the new reporting requirements will apply to directors and officers of all FPIs, including Canadian companies reporting under the Multijurisdictional Disclosure System.
The Reporting Obligations
The HIFAA’s reporting obligations include:
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Reports due on March 18, 2026, for incumbent directors and officers of FPIs. For persons that are directors or officers of FPIs on March 18, 2026, a Form 3 will be due on that date. Form 3s disclose a person’s holdings of equity securities and derivatives of equity securities of the issuer, such as stock options, and include holdings of both ADRs and underlying equity securities.
Holdings through trusts, by certain immediate family members and through personal investment vehicles will also often need to be disclosed.
- Reports for new directors, officers, or newly registered FPIs. Beginning on March 18, 2026, a Form 3 will be due 10 calendar days after a person becomes a director or officer. If an FPI registers its equity securities after March 18, 2026, its existing directors and officers must file a Form 3 on the date of registration.
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Reporting of transactions. Beginning on March 18, 2026, a Form 4 will be required within two business days of any transaction by the director or officer in the FPI’s equity securities or derivatives thereof. This includes open-market transactions, grants of equity compensation, option exercises, and gifts. Transactions are reportable even if effected under a 10b5-1 plan, an effective registration statement, or offshore.
Transactions through trusts, by certain immediate family members and through personal investment vehicles will also often need to be disclosed.
- Deferred transaction reporting. In very limited circumstances, directors and officers of FPIs may be eligible to report specific transactions on a Form 5, which is due 45 days after the company’s fiscal year-end, instead of on a Form 4.
Differences from Section 16 Regime for Domestic Issuers
While the HFIAA imposes meaningful new reporting obligations on directors and officers of FPIs, it does not subject FPIs to the entirety of the Section 16 regime. Importantly:
- The HFIAA does not directly impose trading restrictions on directors and officers of FPIs. Critically, the HFIAA does not subject directors and officers of FPIs to the risk of short-swing profit disgorgement under Section 16(b) of the Exchange Act or restrictions on short sales under Section 16(c). This is a significant difference from the long-standing Section 16 regime applicable to directors, officers, and certain significant shareholders of domestic issuers. In other words, while it imposes important new public reporting obligations, the HFIAA does not directly create new restrictions on trading by directors and officers of FPIs.
- The HFIAA does not apply to 10% securityholders. Unlike the rules for domestic issuers, where securityholders that beneficially own more than 10% of a registered class of equity are subject to Section 16, the HFIAA’s reporting obligations apply only to directors and officers of FPIs.
However, a subset of investors may still be captured by the HFIAA. An investor can be treated as a director and become subject to Section 16 if that investor has “deputized” another person to serve on a company’s board of directors. Whether an investor has become a “director by deputization” is a facts-and-circumstances inquiry. While not express in the text of the HFIAA, the caselaw and guidance around “director by deputization” may apply equally in this context, resulting in such investors having reporting obligations under the HFIAA.
Practical Steps for FPIs
There are a few key steps FPIs should take to prepare for these new reporting obligations:
- Educate directors and officers about the new public disclosure requirements. For many directors and officers of FPIs, the need to publicly disclose personal holdings and transactions will be new and potentially sensitive. Individuals may need time to prepare for these disclosures, which could influence the timing of their transactions.
- Make sure the list of officers is current. The definition of “officer” is in part a functional definition, rather than one that just relies on titles or corporate formalities and can require some judgment to ensure the right list of persons is included. That said, the definition is substantially very similar to the definition of “executive officer” used in the compensation clawback rule (Exchange Act Rule 10D-1) recently adopted by the SEC. As such, many FPIs already have experience applying that definition.
- Obtain EDGAR codes for officers and directors. Directors and officers will need their own SEC filing codes to make the filings required by the HFIAA. Obtaining these codes can often take several days or longer. If directors and officers do not currently have filing codes, FPIs should plan to obtain them well in advance of March 18, 2026.
- Establish a filing process. Directors and officers typically grant a power of attorney to internal counsel to execute Section 16 reports on their behalf. The filings are then prepared by internal counsel (or, in some cases, by external counsel, especially for initial or complex filings). FPIs should determine who will be granted the power of attorney and whether filings will be drafted by internal or external counsel. If internal counsel will draft filings, FPIs should ensure their teams have received appropriate training and have access to the necessary systems or service providers to submit filings to the SEC.
- Prepare initial Form 3s. Gather all relevant information for Form 3s of incumbent directors and officers and prepare the Form 3s in readiness for filing on March 18, 2026.
