On March 5, 2026, the Securities and Exchange Commission (the SEC) issued an order exempting directors and officers of certain foreign private issuers (FPIs) in Canada, Chile, the European Economic Area, the Republic of Korea, Switzerland, and the United Kingdom from the reporting requirements of Section 16(a) the Securities Exchange Act of 1934 (the Exchange Act) that were imposed by the Holding Foreign Insiders Accountable Act (the HFIA Act), which was adopted late last year and is discussed in our prior post. The order was issued pursuant to the exemptive authority granted to the SEC under the HFIA Act.
Scope and Conditions of the Exemption
The exemption is available to directors and officers of any FPI that is (i) incorporated or organized in a “qualifying jurisdiction” and (ii) subject to a “qualifying regulation.” A director or officer will qualify for the exemption if the FPI is incorporated or organized in one qualifying jurisdiction but is subject to a qualifying regulation of a different jurisdiction.
The qualifying jurisdictions are Canada, Chile, the European Economic Area, the Republic of Korea, Switzerland, and the United Kingdom.
The qualifying regulations are Canada’s National Instrument 55-104 – Insider Reporting Requirements and Exemptions, Articles 12, 17, and 20 of Chile’s Securities Market Law and General Rule No. 269, Article 19 of the European Union Market Abuse Regulation, Article 173 of the Republic of Korea’s Financial Investment Services and Capital Markets Act and Article 200 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act, Article 56 of the SIX Swiss Exchange Listing Rules, and Article 19 of the UK Market Abuse Regulation. The SEC determined that each of these regulations covers substantially similar persons, securities, and transactions as Section 16(a) and requires timely public disclosure of changes in beneficial ownership.
Reliance on the exemption is subject to two conditions. First, any director or officer seeking to rely on the exemption must report their transactions in the issuer’s securities as required under the applicable qualifying regulation. Second, 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. If an English version cannot be filed through the regulator’s or listing venue’s online database, the report may be made publicly available on the company’s website.
The SEC noted in the order that it may exercise its right to reassess and modify the order if future changes to qualifying regulations or other material changes in the jurisdiction of incorporation result in such regulations no longer being substantially similar to Section 16(a) requirements, while also noting that it may extend exemptive relief to directors and officers of FPIs incorporated or organized in other jurisdictions in separate future orders if those jurisdictions are determined to have substantially similar requirements.
Absent any further relief, directors and officers of FPIs that are not organized in a qualifying jurisdiction and subject to a qualifying regulation, or that otherwise do not meet the conditions described above, will still need to begin filing reports under Section 16(a) on March 18, 2026.
