Section 16 Reporting Obligations Extended to Insiders of Foreign Private Issuers

On December 18, 2025, President Trump signed into law the National Defense Authorization Act for Fiscal Year 2026 (the “2026 NDAA”), which includes the Holding Foreign Insiders Accountable Act. The Holding Foreign Insiders Accountable Act amends Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) to extend Section 16 reporting obligations to directors and officers (collectively, “insiders”) of foreign private issuers with securities listed on a U.S. national securities exchange or registered pursuant to Section 12(g) of the Exchange Act. Notably, however, the text of the amendments does not extend Section 16(a) reporting obligations to 10%+ holders of a foreign private issuer’s registered securities, nor does it amend Section 16(b) to extend the short-swing liability provisions to insiders of foreign private issuers (or Section 16(c) to extend the short sale restrictions).  In addition, the Holding Foreign Insiders Accountable Act also amends Section 16(a) to provide that the SEC may exempt any persons, securities or transactions from Section 16 reporting if it determines that the laws of a foreign jurisdiction apply substantially similar requirements.

These amendments to Section 16(a) will take effect on March 18, 2026, 90 days after the enactment of the 2026 NDAA.

Section 16 insiders are required to file Form 3 reports within 10 calendar days of becoming an insider of a company with securities listed on a U.S. national securities exchange or registered pursuant to Section 12(g) of the Exchange Act. Subsequent transactions, including purchases and sales, gifts, and equity compensation transactions, must be reported within two business days on Form 4 (with some limited exceptions). Certain other transactions not previously reported on Form 4 must be reported on Form 5 within 45 days of the public company’s fiscal year end.  According to the amendments, the first Form 3 reports for insiders of foreign private issuers will be due March 18, 2026.

This will be a significant departure from prior U.S. disclosure practice for foreign private issuers. Companies should carefully review who they have identified as “executive officers”, as these individuals will now become subject to the reporting requirements of Section 16. Section 16 defines a subject “officer” to include an issuer’s president, principal financial officer, principal accounting officer (or, if there is no such accounting officer, the controller), any vice-president of the issuer in charge of a principal business unit, division or function (such as sales, administration or finance), any other officer who performs a policy-making function, or any other person who performs similar policy-making functions for the issuer, and officers of the issuer's parent(s) or subsidiaries if they perform such policy-making functions for the issuer.  To the extent they have not already done so, directors and officers will also need to apply in advance to the SEC for filing codes in order to be able to file the Section 16 reports on the SEC’s EDGAR system.

                                                                                                                             * * *