Officers and Directors of Foreign Private Issuers Now Subject to Short Swing Profit Reporting Requirements
The Securities and Exchange Commission (the “SEC”) adopted amendments to the rules under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that subject officers and directors of foreign private issuers (as defined below) to the short-swing profit reporting rules of the Exchange Act. Officers and directors of foreign private issuers organized in certain jurisdictions and subject to “qualifying regulations”, as discussed below, are exempt from the reporting requirements.
BACKGROUND
Historical Reporting Requirements
The rules under Section 16(a) of the Exchange Act (the “Section 16 Reporting Rules”) require directors, officers, and beneficial owners of more than 10% of any class of a company’s equity securities to report their holdings of the company’s securities and their transactions in these securities on Forms 3, 4 and 5. Historically, insiders of foreign private issuers have been exempt from these requirements. However, the Holding Foreign Insiders Accountable Act (the “HIFA Act”), enacted in December 2025, amended the applicability of Section 16(a) of the Exchange Act to include directors and officers (but not 10% holders) of foreign private issuers. As a result, the SEC was required to amend the Section 16 Reporting Rules to be consistent with the HFIA Act.
Foreign Private Issuers
A “foreign private issuer” is any non-government foreign issuer unless (a) 50% or more of its securities are owned by US residents, and (b) either (i) the majority of its executive officers or directors are US citizens or residents, (ii) the majority of its assets are located in the US, or (iii) its business is administered principally from the US.
AMENDMENTS
The new amendments conform the Section 16 Reporting Rules to the HIFA Act. Specifically, they:
Require officers and directors of foreign private issuers to File Forms 3, 4, and 5 under the Section 16 Reporting Rules;
Do not subject persons who own 10% or more of a class of securities of a foreign private issuer to the Section 16 Reporting Rules;
Require foreign private issuers having two-tier boards of directors to look to the definition of “director” in Section 3(a)(7) of the Exchange Act to determine which directors are required to report;
Maintain the definition of “officer” in set forth in Rule 16a1-f under the Exchange Act, which includes, president, principal financial officer, principal accounting officer or controller, any vice president of a unit, division or function, or any other officer who performs a policy-making function; and
Have no impact on foreign private issuers whose securities are not registered under Section 12 of the Exchange Act.
COMPLIANCE
The amendments are effective March 18, 2026. Subject to the Exemptive Order described below, all persons who were officers and directors of foreign private issuers as of December 18, 2025 are required to file an initial report on Form 3 with the SEC by March 18, 2026 unless they are no longer an officer or director on March 18, 2026. Persons who became officers or directors of foreign private issuers after December 18, 2025 must file their initial Form 3 on the later of March 18, 2026 and ten days after the date on which they became an officer or director. All filings must be made via EDGAR.
EXEMPTIVE ORDER
On March 5, 2026 the SEC issued an exemptive order exempting officers and directors of foreign private issuers that are (a) incorporated or organized in a “qualifying jurisdiction”, and (b) subject to a “qualifying regulation” of such qualifying jurisdiction or another qualifying jurisdiction from the filing requirements of the Section 16 Reporting Rules. The “qualifying jurisdictions” are: Canada; Chile; the European Economic Area; the Republic of Korea; Switzerland; and the United Kingdom. Importantly, persons relying on the exemption must publish English language copies of the reports they file in the applicable jurisdiction within two business days of such filing. In cases where the applicable jurisdiction does not allow English language filings on its online data base, the English language reports should be made publicly available on the company’s website or elsewhere.
The press release and fact sheet are available here: https://www.sec.gov/newsroom/press-releases/2026-23-sec-adopts-final-rules-holding-foreign-insiders-accountable-act.
The exemptive order can be found here: https://www.sec.gov/files/rules/exorders/2026/34-104931.pdf.
For further information please contact:
Jake Brown: jake.brown@wg-law.com; (212) 509-4741
Travis L. Gering: travis.gering@wg-law.com; (212)509-4723
Claudio A. Guler: claudio.guler@wg-law.com; (212) 509-1416
Janet R. Murtha: janet.murtha@wg-law.com; (212) 509-6314
Marco E. Palmese: marco.palmese@wg-law.com; (212) 509-6310
Daniel A. Wuersch: daniel.wuersch@wg-law.com; (212) 509-4722