On December 18, 2025, President Donald J. Trump signed the Fiscal Year 2026 National Defense Authorization Act (NDAA), which includes Section 8103, known as the “Holding Foreign Insiders Accountable Act.” The legislation represents a significant change for foreign private issuers (FPIs) listed in the United States. Section 8103 imposes insider reporting obligations under Section 16(a) of the Securities Exchange Act of 1934 (Exchange Act) on directors and officers of FPIs, a requirement from which they have historically been exempt.
Existing Section 16(a) requires directors, officers, and more than 10 percent beneficial owners of a class of equity securities registered under the Exchange Act to file ownership reports. Exchange Act Rule 3a12-3(b) currently exempts FPIs from all Section 16 provisions. Under NDAA Section 8103, directors and officers of FPIs will soon be required to:
- file initial ownership reports on Form 3 within ten days of becoming an insider;
- report changes in beneficial ownership (e.g., purchase, sale, gift, grant, exercise, etc.) on Form 4 within two business days;
- submit annual Form 5 reports (for missed or deferred filings) within forty-five days after fiscal year-end; and
- obtain EDGAR codes, if necessary, and make all these filings electronically and in English through the SEC’s EDGAR system.
The amendments to Section 16(a) are effective 90 days from enactment of the legislation. The NDAA also directs the Securities and Exchange Commission (SEC) to issue final rules implementing the amendment within 90 days of enactment and provides authority to the SEC to grant exemptions for persons, securities, or transactions where foreign regulatory regimes provide substantially similar protections. Thus, while the SEC will need to engage in rulemaking to reflect the statutory changes in its rules, directors and officers of FPIs should prepare to comply with the new Section 16 reporting obligations that will go into effect 90 days after the NDAA’s enactment. Notably, the legislation only amended Section 16(a) regarding insider reporting and did not address specifically other provisions in the section, namely Section 16(b) short-swing profit disgorgement or Section 16(c) statutory short-sale restrictions. In addition, the amendment addressing FPIs relates only to directors and officers and does not address more than 10 percent beneficial owners, which differs from how the reporting requirement applies to domestic issuers.
The imposition of Section 16(a) reporting obligations marks a fundamental change in the regulatory landscape for FPIs and introduces a new compliance burden for FPIs and their insiders, who have long operated without these reporting requirements. The change raises governance considerations, as directors and officers will face heightened transparency regarding equity awards, derivative transactions, and other insider dealings.
FPIs should review governance frameworks, update insider trading and equity compensation policies, and establish procedures for timely data collection and EDGAR filings. Discussions with and training for directors and officers may also be needed. Proactive preparation during the ninety-day window before the change to Section 16(a) is effective on Wednesday, March 18, 2026, will be critical to mitigating compliance risk and ensuring adherence to U.S. disclosure standards.
Among other things, FPIs should:
- Identify all Section 16 persons and apply for individual EDGAR codes, if necessary. Note that this process involves getting applications notarized, and current timing for receiving EDGAR codes from the SEC can take two weeks or more.
- Educate Section 16 persons, as well as FPI legal and compliance teams, on the new filing obligations.
- Update internal policies and procedures to implement Section 16 filing obligations.
- Prepare to make initial filings on Form 3 by the March 18, 2026, effective date and further filings as necessary afterward.
- Monitor for SEC rulemaking and additional implementation guidance.
