The Holding Foreign Insiders Accountable Act eliminates a decades-old exemption, and the March 18 deadline leaves almost no runway.
If your company has foreign-national directors or officers, their reporting obligations to the SEC just changed. Dramatically.
On February 27, the SEC adopted final rules implementing the Holding Foreign Insiders Accountable Act (the HFIA Act), which President Trump signed into law on December 18, 2025 as part of the FY2026 National Defense Authorization Act. Starting March 18, directors and officers of foreign private issuers with equity securities registered under Section 12 of the Exchange Act must file the same insider ownership reports that domestic company insiders have filed for decades: Forms 3, 4, and 5, electronically through EDGAR.
A quick note on scope, because this matters: Section 12 registration is what makes a company a "public reporting company" under US securities law. If your stock is listed on the NYSE, Nasdaq, or another US national securities exchange, your securities are registered under Section 12(b). Some companies also trigger Section 12(g) registration based on asset size and shareholder count, even without an exchange listing. The bottom line: this rule targets publicly traded or publicly reporting foreign companies. If you're a privately held company with no SEC-registered securities, this doesn't apply to you. But if your company, or an acquisition target, has securities registered with the SEC, keep reading.
That's six days from now. And if your foreign insiders haven't already started setting up EDGAR credentials, you're behind.
What Happened
The Exemption That Lasted 40 Years Is Gone
For decades, Exchange Act Rule 3a12-3(b) gave foreign private issuers a blanket pass on Section 16(a) reporting. US company insiders had to publicly disclose every stock purchase, sale, and grant within two business days. FPI directors and officers? They could trade with minimal real-time disclosure. Their transactions showed up, if at all, in periodic filings like Form 20-F or under home-country rules that varied wildly in rigor and timing.
That's over.
The HFIA Act (Section 8103 of the FY2026 NDAA) eliminates the exemption entirely. It amends Section 16(a)(1) of the Exchange Act to bring FPI insiders under the same reporting framework as their domestic counterparts.
And the SEC moved fast. Congress gave the Commission 90 days to adopt implementing rules. Chairman Atkins delivered them in 71, with the final rules published in the Federal Register on March 3 (Release No. 34-104903).
What the New Rules Require
Here's what FPI insiders must now do:
Form 3 (Initial Ownership Report). Every current director and officer of an FPI must file Form 3 by March 18, 2026, disclosing all equity securities of the issuer they beneficially own. This filing is required even if the insider owns zero shares. Anyone who becomes a director or officer after March 18 has 10 days from the date they take the position.
Form 4 (Changes in Ownership). Any change in beneficial ownership, including purchases, sales, option exercises, and equity grants, must be reported on Form 4 within two business days of the transaction. One small grace: transactions that occurred before March 18 don't need to be reported on the first Form 4.
Form 5 (Annual Report). Certain exempt transactions and any transactions not previously reported must be disclosed on Form 5, due within 45 calendar days of the issuer's fiscal year-end.
All filings go through EDGAR Next, the SEC's electronic filing system. They must be submitted by 10:00 PM Eastern on the due date and become publicly available immediately. Every filer needs login.gov credentials with multi-factor authentication.
Who's Covered, and Who's Not
The scope is important to get right, and there are several layers.
Which companies? Only foreign private issuers with securities registered under Section 12 of the Exchange Act. In practice, that means foreign companies listed on a US stock exchange (Section 12(b)) or those that have crossed the threshold for mandatory SEC registration based on asset size and shareholder count (Section 12(g)). Privately held companies with no SEC-registered securities aren't affected. Neither are foreign companies that only raise capital through private placements (like Reg D offerings) without registering a class of equity securities. This is a rule for public-market FPIs. Period.
Which people? Directors (as defined by the laws of the FPI's jurisdiction of incorporation) and officers. The officer definition tracks the same standard used for FPI clawback policies: CEO or president, principal financial officer, principal accounting officer, VPs in charge of principal business units, and anyone performing a significant policy-making function.
Not covered. Beneficial owners of 10% or more who aren't also directors or officers. They remain fully exempt from all of Section 16. That's a meaningful carve-out. Pure financial investors holding large blocks don't need to file.
Partial exemption retained. FPI insiders are only subject to Section 16(a) reporting. They remain exempt from Section 16(b)'s short-swing profit disgorgement rules and Section 16(c)'s short-sale prohibitions. They need to report, but they don't face the clawback risk that domestic insiders carry.
The Exemptive Order: Six Jurisdictions Get Relief
On March 5, the SEC issued an exemptive order (Release No. 34-104931) providing relief for FPIs incorporated in jurisdictions with "substantially similar" disclosure requirements. Six qualifying jurisdictions made the list:
- Canada
- Chile
- European Economic Area (all 27 EU member states plus Iceland, Liechtenstein, and Norway)
- Republic of Korea
- Switzerland
- United Kingdom
The exemption uses a two-part test. The FPI must be incorporated or organized in a qualifying jurisdiction, and it must be subject to a qualifying regulation in that jurisdiction. The qualifying regulations include EU MAR Article 19, UK MAR Article 19, Korea's Financial Investment Services and Capital Markets Act (Article 173), and Switzerland's SIX Exchange Listing Rules (Article 56).
There's useful flexibility built in. A Canadian-incorporated FPI listed on a German exchange and subject to EU MAR qualifies under both prongs, even though the jurisdiction and the regulation come from different countries.
But the conditions are real. Directors and officers relying on the exemption must still file transaction reports under their home-country regime and make those reports publicly available in English within two business days. If the home filing system doesn't support English, the FPI can post translations on its website.
What It Means for Your Business
The Cayman Islands Problem
Here's the number that should get your attention: 33% of all FPIs are incorporated in the Cayman Islands, according to the SEC's own data. Another 22% are headquartered in mainland China.
Neither jurisdiction made the exempted list.
That means roughly half of the FPI population faces full Section 16(a) compliance starting March 18, with no alternative home-country filing option. For Cayman-incorporated FPIs (which include a large number of Chinese companies that used Cayman structures for their US listings), every director and officer needs EDGAR access, login.gov credentials, and a filing agent or internal process ready to go in less than a week.
If you're on the board of one of these companies, or advising one, this is a hair-on-fire moment.
The Practical Compliance Crunch
The SEC estimates that the new requirements will generate roughly 8,883 additional Form ID filings, with a total burden of about 5,330 hours just for EDGAR registration. That's the registration step alone, before anyone files a single Form 3 or 4.
The real burden is operational. Here's what actually needs to happen:
EDGAR registration. Each covered insider needs a Form ID application, which requires login.gov individual account credentials, a notarized signature, and an authenticating document upload. If your foreign directors are overseas, the notarization requirement alone creates a logistics problem. You're coordinating across time zones, language barriers, and different legal systems for what amounts to a credentialing exercise.
Powers of attorney. Most insiders won't file their own Forms 3 and 4. You'll need POAs in place so your Section 16 filing agent (whether that's internal counsel, an outside firm, or a service provider) can file on their behalf.
Insider identification. You need to apply the SEC's officer definition, not your home-country definitions. Someone who carries a VP title and runs a major division is covered, even if they wouldn't be considered a "director or officer" under the laws of the country where the FPI is incorporated. Get this wrong and you'll have a compliance gap you don't know about.
Trading coordination. Form 4 requires disclosure within two business days. If an insider in Tokyo or London executes a trade, someone in your compliance chain needs to know about it and get a filing submitted to EDGAR by 10:00 PM Eastern on the second business day. Time zones matter. A lot.
The M&A Angle
If you're in the middle of a cross-border acquisition targeting an FPI, or you're bringing foreign executives onto a US-listed company's board, this changes your diligence checklist.
For acquirers: your deal model should now account for the target's Section 16(a) compliance infrastructure, or the lack of it. Post-closing, every director and officer of the acquired FPI will need EDGAR access and filing processes. That's an integration cost you may not have budgeted for.
For companies recruiting foreign board members: any foreign national you appoint to the board of a publicly listed or SEC-reporting company will need to file Form 3 within 10 days. Build EDGAR credential setup and insider trading policy training into your onboarding process now.
Worth Flagging
The SEC specifically noted that it may extend exemptive relief to additional jurisdictions. The Division of Corporation Finance's staff is available to evaluate whether other countries' disclosure regimes qualify as "substantially similar." If your FPI is incorporated in a jurisdiction with a mature insider-trading disclosure regime (Japan, Australia, Singapore, and Hong Kong come to mind), it's worth reaching out proactively.
But don't wait for that. March 18 is the deadline regardless, and there's no guarantee additional jurisdictions will be added, or when.
Practical Takeaways
Here's the action list, broken down by role:
1. Identify every covered insider immediately (General Counsel / Compliance). Apply the SEC's officer definition, not your home-country standard. Map every director and every officer who performs a significant policy-making function. Do this today.
2. Get EDGAR credentials in process now (Legal / IT). If your insiders don't have EDGAR accounts, submit Form ID applications this week. The login.gov registration requires multi-factor authentication and a notarized signature. For overseas insiders, coordinate with local counsel or notary services immediately.
3. Prepare Form 3 filings for March 18 (Filing Agent / Legal). Every covered insider needs a Form 3 on March 18, even if they hold zero shares. Pre-draft these now so they're ready to submit.
4. Execute powers of attorney (Legal / Board Secretary). Your filing agent needs signed POAs to submit forms on behalf of each insider. If directors are scattered across time zones, start collecting signatures now.
5. Update your insider trading policy (General Counsel). The policy needs to reflect the new Form 4 two-business-day filing window. Make sure insiders understand they must notify your compliance team before transacting, and that your compliance team has a process to file within the deadline.
6. Set up a transaction monitoring process (Compliance / HR). Equity grants, option exercises, and plan-related transactions trigger Form 4. Your equity plan administrator and broker need to be in the notification chain so nothing slips through.
7. Determine exemptive relief eligibility (Legal). If your FPI is incorporated in one of the six qualifying jurisdictions, confirm you meet both prongs of the exemption test: correct jurisdiction of incorporation AND subject to a qualifying regulation. Document your analysis.
8. Brief the board at the next meeting (CEO / General Counsel). This is a governance change, not just a compliance checkbox. Directors need to understand that their personal transactions will now be publicly visible on EDGAR within two business days. That's a big shift in transparency for people who've never had to deal with it.
9. If you're in a deal, update your diligence checklist (M&A Team). For pending acquisitions of FPIs, add Section 16(a) readiness to your integration plan. For companies appointing foreign directors, build EDGAR onboarding into the appointment process.
What We're Watching
Additional exemptive orders. The SEC left the door open to extend relief to more jurisdictions. Watch for supplemental orders covering Japan, Australia, Hong Kong, and Singapore, where insider disclosure regimes may qualify.
SEC FAQs and staff guidance. The Division of Corporation Finance has published initial FAQs and will likely issue more guidance as compliance questions surface after March 18.
Foreign Private Issuer definition overhaul. Separately, the SEC published a Concept Release on FPI Eligibility in June 2025, inviting comment on whether the definition of "foreign private issuer" itself needs updating. If that definition changes, the population of issuers subject to Section 16(a) could shift in ways nobody's priced in yet.
Enforcement posture. The SEC hasn't signaled how aggressively it'll pursue late or missed filings in the early days of the new regime. Watch for enforcement actions or no-action positions that tell you how much grace period, if any, to expect.
This rule has been coming since December, but the compliance timeline is brutal. Six days isn't much runway for companies that haven't started preparing. The good news: the requirements themselves aren't complicated. They're the same forms that domestic insiders have filed for years. The challenge is operational. Getting EDGAR credentials for people who've never touched the system. Building notification processes across time zones. Making sure your board understands the new transparency standard they're living under.
If you haven't started, start today. March 18 doesn't move.
This article is for informational purposes only and does not constitute legal advice. Every company's situation is different, and you should consult with qualified legal counsel before making compliance decisions based on the developments discussed here.
Is your board ready for the new insider reporting rules? Consilium Law helps growth-stage companies with foreign directors and cross-border governance challenges build compliance infrastructure that works. Get in touch.