SEC Expands Section 16 Insider Reporting Requirements to Foreign Private Issuer Directors and Officers

On February 27, 2026, the U.S. Securities and Exchange Commission adopted final rule and form amendments under the Securities Exchange Act of 1934 to implement the Holding Foreign Insiders Accountable Act (HFIA Act), which was enacted on December 18, 2025, as part of the National Defense Authorization Act for Fiscal Year 2026. The final rule makes the following important changes to existing disclosure rules:  

• Insider Reporting Requirements Extended: Directors and officers of foreign private issuers (FPIs) with a class of equity securities registered under Section 12 of the Exchange Act must now comply with Section 16(a) insider reporting obligations. This means they must disclose their beneficial ownership and transactions in the issuer’s equity securities by filing Forms 3, 4, and 5 electronically in English through the SEC’s EDGAR system, beginning March 18, 2026, the effective date of the HFIA Act.  

• Removal of Blanket Exemption: The SEC amended Rule 3a12-3(b) to eliminate the longstanding exemption that previously excluded FPI insiders from Section 16 reporting. It replaced that with targeted exemptions—specifically from Section 16(b) short-swing profit disgorgement and Section 16(c) short-sale prohibitions.  

• Clarifying Who Must Report: Under amended Rule 16a-2, only directors and officers of FPIs are covered; 10 percent beneficial owners who are not officers or directors remain excluded from the Section 16(a) reporting rules.  

In short, the SEC’s new rules bring foreign company insiders trading on U.S. markets into the same reporting framework long applied to domestic corporate insiders, enhancing investor information on beneficial ownership and trading.  

Enforcement of Section 16(a) reporting is handled by the SEC.  Generally, a failure to report as required could lead to cease-and-desist orders and, if particularly egregious, monetary penalties.  Given the new requirement, the SEC will be focused on potential late filings. 

FPIs should take steps to update their internal procedures to ensure that they comply with the obligations to timely disclose subject transactions.   

This summary is provided for informational purposes only and is not intended to constitute legal advice nor does it create an attorney-client relationship with Rimon, P.C. or its affiliates.