Insider Transaction Reporting Will Now Apply to Directors and Officers of Foreign Private Issuers

On December 18, 2025, President Trump signed the National Defense Authorization Act for Fiscal Year 2026, which included the Holding Foreign Insiders Accountable Act (Act).

The Act adds Foreign Private Issuers (FPIs) to the list of entities that are subject to the insider transaction reporting requirements of Section 16(a) of the Exchange Act (Exchange Act). It directs the Securities and Exchange Commission (SEC) to issue final regulations or amend existing regulations to implement this new reporting obligation by March 18, 2026. As a result, once the regulations are adopted by the SEC, directors and officers of FPIs will be subject to the same insider transaction reporting requirements as directors and officers of domestic companies are.

These reporting obligations require directors and officers to report their beneficial ownership of their company’s equity securities and to report any subsequent transactions in those securities generally within two business days after they occur.

The Act does not extend the short-swing trading liability of Section 16(b) or the short-sale restrictions of Section 16 (c) to an FPI’s directors and officers, and the new reporting requirements do not apply to 10 percent beneficial owners.

The Act authorizes the SEC to exempt FPI directors and officers from the Section 16(a) reporting requirements where foreign law imposes “substantially similar” obligations. However, the SEC is not required to provide any such exemption.

While the reporting requirements under Section 16(a) are obligations of a company’s officers and directors, their companies customarily assist them in complying with those requirements. FPIs should prepare now to provide that assistance once the new requirements are in effect. This should include the following.

Identify Directors and Officers

Rule 16a-1(f) under the Exchange Act defines the term “officer” to mean senior officers of an issuer who perform a policy-making function, including 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.

Exchange Act Section 3(a)(7) defines the term “director” to mean any director of a corporation or any person performing similar functions with respect to any organization, whether incorporated or unincorporated.

Determine Securities Beneficially Owned

The obligation to report the ownership of equity securities and transactions in equity securities by directors and officers applies to equity securities beneficially owned by them. For this purpose, a director or officer beneficially owns equity securities if he or she has a direct or indirect pecuniary interest in them. A pecuniary interest is the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in the subject securities. Exchange Act Rule 16(a)-1(a)(2) identifies those situations in which a director or officer may be deemed to have an indirect pecuniary interest in equity securities.

For purposes of the Section 16(a) reporting requirements, equity securities include options, warrants, convertible securities, stock appreciation rights, share units, and similar instruments.

Evaluate Controls to Identify Transactions

FPIs should evaluate their controls and policies in place for the grant of equity compensation awards and the clearance of trades by directors and officers to ensure that they will capture the information needed to timely report transactions in equity securities. They should also educate their directors and officers on the rules that will apply to them.

Unlike the reporting requirements for Schedules 13D and 13G, which require reporting persons subject to those rules to file amendments to report material changes in ownership, the insider trading reporting requirements under Section 16(a) apply to any transaction in equity securities beneficially owned.

Prepare for the Filing Process

The required insider transaction reports (Forms 3, 4, and 5) will need to be filed with the SEC using its EDGAR system. To be in a position to do this, an FPI will need to assist its directors and officers in registering with EDGAR Next and obtaining the filing codes f.rom the SEC that are required for filing under the EDGAR system.

Buchanan’s Securities & SEC team is ready to assist foreign private issuers with questions and filings related to this new reporting requirement. For decades, our attorneys have counseled clients across nearly every industry, handling securities law compliance.