Section 16 Reporting Required for Foreign Private Issuers in 2026

On December 18, 2025, President Trump signed into law the Holding Foreign Insiders Accountable Act (HFIAA), which eliminates a long-standing exemption that enabled foreign private issuers (FPIs) to avoid insider reporting obligations under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The new law will take effect on March 18, 2026. Once in effect, directors and officers of FPIs will be required to publicly report their ownership in, and transactions involving, the applicable FPI’s securities to the U.S. Securities and Exchange Commission (SEC) on Forms 3, 4, and 5.

A summary of the relevant provisions of Section 16 along with takeaways and next steps are described below.

SECTION 16 REPORTING – BASICS

Covered Persons

Generally, Section 16 applies to directors, officers, and large shareholders (i.e., greater than 10%) (“Reporting Persons”). However, the HFIAA will only require Section 16 reporting for directors and officers of FPIs—it will not require large shareholders to report an FPI’s securities transactions.

Directors include any director of the issuer or any person performing a similar function.

Officers subject to Section 16 are defined in Rule 16a-1(f) of the Exchange Act, and include  any “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.”

Reporting Obligations and Required Forms

Section 16 requires Reporting Persons to disclose their beneficial ownership of securities of a company and make prompt disclosure of transactions in a company’s securities. Section 16 reporting is done through three forms:

• Form 3. A Form 3 is the initial form filed by a Reporting Person to report their holdings and must be filed by a Reporting Person within 10 days of becoming an insider or immediately upon an issuer’s registration of securities under Section 12(b) or 12(g). Pursuant to the HFIAA, a Form 3 must be filed by each director and officer of an FPI on March 18, 2026.
• Form 4. Form 4 is used by Reporting Persons to disclose most equity transactions, including purchases and sales, gifts, and compensation-related transactions (e.g., equity compensation grants, sales to cover exercise price payments and tax withholding obligations). A Form 4 must be filed within two business days following a transaction unless the applicable transaction is exempt from Section 16 reporting requirements or subject to deferred reporting on Form 5 (see below).
• Form 5. Form 5 is used to report certain transactions that are eligible for deferred reporting and transactions that should have been reported on Form 4 during the prior fiscal year. If any transaction is required to be reported on Form 5, the Form 5 is due 45 calendar days after the issuer’s fiscal year end.

Securities’ Reporting Requirements

Transactions and holdings in securities that must be reported under Forms 3, 4, and 5 include not only common equity and other share capital but also derivative securities (e.g., options, warrants, puts, calls, or other rights or obligations to purchase or sell share capital).

Consequences of Failure to Timely File Section 16 Reports

If at any point during a fiscal year, a Reporting Person fails to timely make a Section 16 filing, the issuer must disclose such failure. Domestic issuers must disclose the failure in their Annual Report on Form 10-K or, if the issuer is incorporating the disclosure required by Part III of Form 10-K by reference to its proxy statement (as most do), in its proxy statement. It is possible that in the final regulations to carry out the HFIAA, the SEC will require FPIs to disclose any delinquent Section 16 filings in their Annual Report on Form 20-F.

In connection with delinquent Section 16 filings, the SEC may also (i) seek civil penalties, (ii) issue a permanent cease-and-desist order, and/or (iii) require that transactions be accounted for and profits disgorged.

KEY TAKEAWAYS

• Timeline. The HFIAA takes effect on, and the SEC must issue final regulations to carry out the HFIAA by March 18, 2026.
• No Significant Shareholder Reporting. The HFIAA only applies to directors and officers of FPIs. Accordingly, transactions of significant shareholders in securities of FPIs will still be exempt from Section 16 reporting obligations.
• FPIs Are Still Exempt from Short Swing Profit Obligations. Section 16(b) of the Exchange Act can require disgorgement of profits from sales of securities within a six-month period from a matching transaction in securities (i.e., a purchase or other acquisition of securities). However, directors and officers of FPIs will continue to be exempt from Section 16(b), as the HFIAA only amends Section 16(a).
• Potential Exemption for FPIs with Similar Reporting Requirements. The HFIAA permits the SEC to provide exemptions to the reporting requirements for persons, securities or transactions if the SEC determines that such persons, securities or transactions are subject to “substantially similar requirements” under the laws of a foreign jurisdiction. Any rule for exemptive relief may not be finalized until after the Section 16 reporting obligations become applicable to directors and officers of FPIs. Accordingly, irrespective of whether an FPI is subject to similar requirements in a foreign jurisdiction, each FPI should prepare to comply with the Section 16 reporting obligations on March 18, 2026.

NEXT STEPS

• Identify Section 16 Officers. FPIs should identify which of their officers constitute officers for Section 16 purposes. In many cases, the Section 16 officers of an FPI will be the same as the officers reported in the FPI’s Annual Report on Form 20-F, but, in certain circumstances, there may be differences between an FPI’s Section 16 officers and officers reported on its Form 20-F. Accordingly, FPIs should consider whether
  
  (i) all of the officers disclosed on their Form 20-F meet the definition in Rule 16a-1(f) (as described above) and (ii) whether there are any officers not disclosed on their Form 20-F that meet the definition in Rule 16a-1(f).
• Enroll in EDGAR Next. In order to file Forms 3, 4, and 5, directors and officers will need to be enrolled in the EDGAR Next reporting system. Many directors and officers of FPIs are not enrolled in EDGAR Next, as directors and officers previously would have only required EDGAR codes (i) if they were serving as a director or officer of a domestic public company or (ii) for purposes of filing Form 144s for sales pursuant to Rule 144 under the Securities Act of 1933, as amended. Accordingly, in advance of March 18, 2026, companies should identify which officers and directors will need to be enrolled in EDGAR Next and should coordinate with such officers and directors to ensure they are enrolled prior to the commencement of the Section 16 reporting requirements for FPIs.
• Prepare to Disclose. FPIs should design internal reporting policies and procedures to ensure directors and officers timely make Section 16 filings. FPIs should communicate the new reporting obligations to directors and officers and should explain that all Section 16 reports will be public and available on EDGAR. Further, while the Section 16 reporting obligations are obligations of the directors and officers, it is common for issuers (and their counsel) to assist in the preparation of Section 16 reports and facilitate the filing thereof, including often obtaining a power‑of‑attorney from each director and officer allowing one or more specified officers of the FPI to execute and file Section 16 filings on the director’s or officer’s behalf. Accordingly, FPIs should consider the procedures that are appropriate for the company, directors, and officers and should prepare to implement those procedures (including, for example, by obtaining powers-of-attorney from directors and officers if the issuer intends for a specific officer to execute and file Section 16 reports on behalf of directors and officers). Further, FPIs should consider whether an internal training is appropriate to inform directors and officers of the reporting obligations and their consequences.
• Prepare for Initial Form 3 Filings. Each director and officer of an FPI will be required to make an initial filing on March 18, 2026, reporting all of the equity securities of the FPI held by such director or officer as of such date.