SEC grants exemptions for certain dual-listed FPIs just ahead of March 2026 compliance date for new beneficial ownership reporting regime for their directors and officers

In December 2025, the US Congress enacted a law removing a disclosure exemption enjoyed by directors and officers of SEC-reporting non-US companies that meet the definition of Foreign Private Issuer (FPI). The new disclosures are required by the new Holding Foreign Insiders Accountable Act (the HFIA Act). See here for our previous blog on the topic.

As noted previously, directors and officers of SEC-reporting FPIs were not required to publicly disclose their equity holdings of their company (and any changes to such holdings) in filings with the SEC as required by Section 16(a) of the Securities Exchange Act of 1934 (Section 16(a)). By contrast, their counterparts at SEC-reporting US companies have been required to make such filings by Section 16(a) for decades. The HFIA Act removed a nine decades-old exemption from Section 16(a) applicable to directors and officers of FPIs.

The change takes effect on 18 March 2026, 90 days after the HFIA Act’s enactment on 18 December. The 18 March date did not allow much time for FPIs and their director and officer insiders to develop Section 16 compliance programmes, so prompt action to prepare has been required as outlined below. 

In a positive development, however, on 5 March 2026, the SEC exercised its broad exemptive power under the HFIA Act to exempt from the new disclosure requirements directors and officers of SEC-reporting FPIs that are incorporated in certain “qualifying jurisdictions” and subject to certain “qualifying regulations” in that or another qualifying jurisdiction. The SEC determined that the relevant laws of these jurisdictions apply “substantially similar” disclosure requirements to the HFIA Act. Six qualifying jurisdictions are exempt under the SEC Order granting the exemption, namely:

• Canada
• Chile
• The European Economic Area (EEA - the 27 member states of the European Union plus Iceland, Liechtenstein and Norway)
• The Republic of Korea
• Switzerland
• The United Kingdom.

The qualifying regulations include Article 19 of the EU Market Abuse Regulation (applicable to EEA countries) and Article 19 of the UK Market Abuse Regulation.

The exemption is subject to two conditions: 

• The director or officer concerned must be required to report their transactions in their FPI’s equity securities under the qualifying regulation to which they are subject (this does mean that, for example “officers” (within the meaning of Rule 16a-1(f)) who are not persons discharging management responsibility (PDMR) within the meaning of UK or EU MAR of a UK or EEA-listed company would remain subject to the Section 16(a) filing requirements), and 

• Any report filed under a qualifying regulation must be publicly available in English within no more than two business days of its public posting. 

The exemption will not help directors and officers of SEC-reporting FPIs that are organised in jurisdictions other than the six qualifying jurisdictions even if such directors and officers are subject to qualifying regulations of a qualifying jurisdiction (for example, a dual UK and US-listed Bermudan incorporated entity). However, the exemption will apply to directors and officers of SEC-reporting FPIs that are organised in one qualifying jurisdiction but subject to qualifying regulations of another qualifying jurisdiction.

Freshfields engaged actively with the SEC on the HFIA Act to provide information and analysis on possible jurisdiction-specific exemptions. We will continue to monitor developments in this area, including the application of the HFIA Act, the SEC’s 2025 FPI definition concept release and its enforcement stance more generally towards FPIs, as discussed in our earlier blogs. 

For SEC-reporting FPIs incorporated in jurisdictions without an exemption, each director and officer must do the following:

• file a Form 3 with the SEC by 18 March to report their direct and indirect beneficial ownership in the FPI’s equity securities (this includes any equity security of the FPI and any derivative security)
• report subsequent transactions in these equity securities on SEC Form 4 within two business days of the relevant transaction
• report certain previously unreported transactions on SEC Form 5 within 45 days after the end of the applicable fiscal year.

Transactions include:

• purchases and sales
• gifts
• compensation-related transactions such as equity compensation grants, sales to cover exercise price payments and tax withholding obligations.

Filings must be made electronically and in English on the SEC’s EDGAR Next system. In practice, US companies usually make these filings on behalf of the director or officer, but the individual concerned must have the relevant codes for the EDGAR Next system. If any FPI insider does not already have EDGAR codes, they should promptly apply for them. 

Section 16(a) requires the reporting of holdings that are beneficially owned by the FPI’s directors or officers, directly or indirectly. Beneficial ownership is based on whether the insider has a pecuniary interest in the relevant securities. Indirect beneficial ownership can include securities held by a spouse or certain other family members as well as securities held by or through certain trusts, corporations or other entities that hold equity securities of the company for the benefit of the director or officer or certain family members. Generally, the holdings of each director or officer must be analysed to determine the securities that must be reported.

As noted previously, FPIs have already identified their “executive officers” to comply with the SEC’s incentive compensation clawback rule that went into effect in December 2023. They may want to review this analysis in preparing to comply with the new Section 16(a) reporting requirement for their directors and officers.  The identity of such officers will now be publicly disclosed and more closely scrutinized.  Note that the definition of an “officer” for Section 16 purposes may not match precisely with an FPI’s home country definition of officer or PDMR. 

In a further development, on 9 March 2026, the SEC’s Division of Corporation Finance issued FAQs on the HFIA Act. These comprise five practical questions and responses including:

• Where an FPI first registers an equity security with the SEC after 18 December 2025 but before 18 March 2026, its directors and officers must file their Form 3 by 18 March if they were in post as of the effective date of the registration statement. If any individual became a director or officer of the FPI after the registration statement became effective, the Form 3 for such individuals would be due on the later of 18 March or 10 days after their date of appointment as a director or officer
• Guidance on the application of Rule 16a-2(a). This rule requires a director or officer to report on Form 4 certain transactions taking place within six months before the director or officer became subject to section 16(a) reporting solely because the FPI registered a class of equity securities under Section 12 of the Securities Exchange Act. The question is whether after the effective date of the HFIA Act, FPI insiders are required to file a Form 4 relating to certain transactions undertaken before March 18. The answer depends on when the issuer registered the class of equity securities - if this was done before 18 March 2026, there is no such Form 4 reporting obligation. However, if the registration occurs on or after 18 March, directors and officers who undertook these certain transactions before 18 March 2026 would have a reporting obligation on Form 4 for such transactions.

The FAQs show that the SEC Staff expects FPIs directors and officers to comply fully with Section 16(a) reporting from the 18 March 2026 compliance date.

In general, Section 16(a) reporting is another step towards “levelling the playing field” between SEC-reporting domestic issuers and FPIs, for example, as mentioned by SEC Commissioner Crenshaw in connection with the recent SEC FPI definition concept release. However, as the new exemption for the six jurisdictions shows and as SEC Chair Atkins has recently indicated, the regulator wants the US to remain an attractive listing venue for FPIs and to provide US investors with the opportunity to trade in those FPIs. 

Check back with us regularly as the regulatory framework for FPIs is a key focus at the SEC and we expect more developments in the near term.   

For questions about the application of this exemptive order or Section 16(a) reporting to foreign private issuers, please consult with the authors or your regular Freshfields capital markets contact.