Foreign Private Issuer Section 16 Exemption: 2026 Compliance Guide

The blanket exemption that shielded foreign private issuer directors and officers from SEC insider reporting is gone. The Holding Foreign Insiders Accountable Act, signed into law on December 18, 2025, ended it. What replaced it is narrower, conditional, and depends on facts specific to each individual insider, not just the company they work for.

This guide is for the general counsel, CFO, or compliance officer at a foreign private issuer who needs to know, right now, whether their directors and officers must file Forms 3, 4, and 5 with the SEC, and what happens if they do not.

Key takeaway: Being incorporated in a qualifying jurisdiction is necessary but not sufficient. Each individual director or officer must also be personally subject to a qualifying home-country regulation, and must publish English-language reports within two business days. Miss either condition and SEC filings are required.

What the HFIA Act Changed for Foreign Private Issuers

Before December 2025, Exchange Act Rule 3a12-3(b) exempted FPI securities from all of Section 16, including the reporting obligations in Section 16(a), the short-swing profit disgorgement rules in Section 16(b), and the short-sale prohibitions in Section 16(c). FPI directors and officers filed nothing with the SEC on their personal holdings.

The Holding Foreign Insiders Accountable Act tore out the Section 16(a) piece. Effective March 18, 2026, every director and officer of an FPI with equity securities registered under Section 12 of the Exchange Act must file the same beneficial ownership reports as domestic company insiders: Form 3 (initial ownership), Form 4 (changes within two business days), and Form 5 (annual catch-all). The SEC adopted final implementing rules on February 27, 2026, amending Rule 3a12-3(b), Rule 16a-2, and Forms 3, 4, and 5.

Two things did not change. Section 16(b) short-swing profit disgorgement and Section 16(c) short-sale prohibitions still do not apply to FPI insiders. As Morrison and Foerster noted: "FPI insiders will be subject only to the reporting requirements under Section 16(a). The short-swing profit rules under Section 16(b) and short sale prohibitions under Section 16(c) will not apply to FPI insiders." If you have been worried about short-swing profit liability for your non-US board members, that concern remains off the table. For a detailed walkthrough of how Section 16(b) works for domestic insiders, see our short-swing profit rule calculation guide.

Who Is Still Exempt: The Qualifying Jurisdiction Framework

The SEC issued two conditional exemptive orders that preserve relief for FPI directors and officers already subject to comparable home-country reporting regimes. The first order, Release No. 34-104931, was issued on March 5-6, 2026, just ten days before the compliance deadline. A second order, Release No. 34-105517, issued on May 20, 2026, added three more jurisdictions. Together they cover approximately 35 countries.

Qualifying Jurisdictions and Their Regulations

The May 2026 second order is the piece most law firm summaries have not yet fully addressed. It materially expanded the framework by adding Australia, India, and Singapore, bringing in major FPI domicile markets that were left exposed by the March order.

The Two-Condition Test Every Insider Must Pass

Qualifying jurisdiction status is the starting point, not the finish line. The exemption applies to a specific director or officer only if both of the following conditions are satisfied.

Condition 1: The individual must personally be subject to a qualifying regulation.

The FPI being incorporated in Canada or the UK is not enough. Each director or officer must themselves be required to report transactions in the issuer's securities under the applicable qualifying regulation. As Skadden noted: "If an officer who meets the definition of a Section 16 officer under SEC Rule 16a-1(f) is not subject to any of the qualifying regulations, that officer would not be exempt from Section 16(a)."

This creates a real operational problem. An FPI incorporated in Germany and subject to EU MAR may have board members who, for various structural reasons, fall outside the personal scope of Article 19 reporting obligations under their home regulator. Those individuals must file with the SEC even if every other board member is exempt. FPIs with two-tier board structures should pay particular attention: the SEC has indicated that the definition of "director" for Section 16(a) purposes follows Section 3(a)(7) of the Exchange Act and may be broader than what Form 20-F treats as the board of directors.

Condition 2: English-language reports must be publicly available within two business days.

Any report filed under the qualifying regulation must be made publicly available in English within two business days of its public posting. The SEC's order addresses the practical reality that many home-country regulators do not publish English versions of insider transaction reports. If an English version cannot be filed through the relevant regulator's or exchange's online database, the company may post the report on its own website to satisfy this condition.

This is the condition most compliance teams underestimate. A UK director filing under UK MAR with the FCA will generally have no problem, since the FCA's system publishes in English. A director filing under EU MAR with a national competent authority that publishes only in the local language, say the AMF in French or BaFin in German, will need a parallel English publication process. The company website fallback is available, but it requires an operational workflow: translation, review, and publication within two business days of the home-country filing.

Decision Tree: Does Your Director or Officer Need to File with the SEC?

Work through these questions in order.

1. Is the person a director or officer of an FPI with equity securities registered under Section 12? If no, Section 16(a) does not apply. If yes, continue.
2. Does the person meet the definition of "officer" under SEC Rule 16a-1(f), or "director" under Section 3(a)(7) of the Exchange Act? If no, no filing required. If yes, continue.
3. Is the FPI incorporated or organized in a qualifying jurisdiction? (See table above.) If no, SEC filing required. If yes, continue.
4. Is the FPI subject to a qualifying regulation, either of the same jurisdiction or of a different qualifying jurisdiction? If no, SEC filing required. If yes, continue.
5. Is this specific individual personally required to report transactions under that qualifying regulation? If no, SEC filing required. If yes, continue.
6. Can the company make English-language reports publicly available within two business days of posting? If no, SEC filing required. If yes, the exemption applies and no Forms 3, 4, or 5 need to be filed with the SEC.

Note the cross-jurisdiction scenario: an FPI incorporated in Canada whose securities are listed in Germany and subject to EU MAR qualifies, because Canada satisfies the incorporation prong and EU MAR satisfies the qualifying regulation prong. The two prongs do not need to come from the same jurisdiction.

What About 10% Beneficial Owners?

10% beneficial owners of FPIs who are not directors or officers remain fully exempt from Section 16 in its entirety, including Section 16(a) reporting. This carve-out is written directly into the HFIA Act and reflected in the SEC's amendment to Rule 16a-2. It is a significant distinction from the domestic issuer framework, where 10% holders face the same Form 3, 4, and 5 obligations as directors and officers.

For large institutional shareholders in FPIs, this means no Section 16 filing obligation at all, regardless of jurisdiction. Their reporting obligations, if any, run through Schedule 13D or 13G, not Section 16. See our beneficial ownership reporting thresholds comparison for how those thresholds interact across regimes.

What Forms Apply and When

For FPI directors and officers who do not qualify for the exemption, the filing obligations mirror those of domestic insiders:

• Form 3: Initial statement of beneficial ownership. For existing officers and directors, the deadline was March 18, 2026. For new insiders, due within 10 calendar days of becoming a director or officer (or on the effective date of the Section 12 registration for an IPO). See our Form 3 filing requirements walkthrough for the mechanics.
• Form 4: Changes in beneficial ownership, due within two business days of the transaction. A sale on Tuesday must be filed by 10:00 pm Eastern time on Thursday.
• Form 5: Annual catch-all for transactions not previously reported on Form 4, due within 45 calendar days after the FPI's fiscal year end.

FPIs whose directors and officers need to file should confirm EDGAR access immediately. The SEC takes an average of six business days to review a Form ID application, and the volume of new filer applications since March 2026 has been significant. Any director who has never filed with the SEC will need a new CIK before any form can be submitted.

For a practical breakdown of Form 4 transaction codes, which apply to FPI insiders even though Section 16(b) does not, see our Form 4 transaction codes guide.

FPIs in Non-Qualifying Jurisdictions: The Petition Process

FPIs incorporated in jurisdictions not covered by either exemptive order, including Japan, Brazil, and others, face full SEC Section 16(a) filing obligations with no current relief. The SEC has, however, signaled openness to extending exemptions to additional jurisdictions.

Section 16(a)(5) of the Exchange Act, as added by the HFIA Act, expressly authorizes the Commission to "conditionally or unconditionally exempt any person, security, or transaction... if the Commission determines that the laws of a foreign jurisdiction apply substantially similar requirements."

To request exemptive relief for a jurisdiction not yet covered, the process is:

1. Contact the SEC's Office of International Corporate Finance before submitting: call 202-551-3450 or email CFHFIArequests@sec.gov.
2. Submit a nonpublic request via the SEC's webform.
3. The submission should include: the foreign jurisdiction, identification of the foreign law(s) creating beneficial ownership reporting obligations, the persons, securities, and transactions covered, and the timing and availability of reports in English.

The SEC has indicated it will keep submissions nonpublic unless disclosure is required by law. Realistic timelines for a response are not specified in the current guidance, so FPIs in non-qualifying jurisdictions should begin filing Forms 3, 4, and 5 while any petition is pending.

Operational Implications for Compliance Teams

Even FPIs that qualify for the exemption face real operational work. Here is what needs to happen.

Update insider trading policies. Many FPI insider trading policies were written assuming no SEC Section 16 obligations. Even if the exemption applies, the company's compliance program should document the two-condition analysis for each director and officer, and confirm it annually as board composition changes.

Build the English-language publication workflow. For FPIs relying on the website fallback, this means a defined process: who receives the home-country filing notification, who translates it, who reviews it, and who posts it, all within two business days. The two-business-day clock starts when the home-country report is publicly posted, not when the company learns about it.

Assess D&O support arrangements. FPIs have historically assisted their directors and officers with no Section 16 filings because there were none. Now, for insiders who do not qualify for the exemption, the company needs to decide whether to provide filing support, and what indemnification or liability exposure exists if a filing is missed. The SEC's enforcement posture on late Section 16 filings is active; see our Section 16 late filing penalties guide for context.

Communicate with non-US board members. Many non-US directors have never interacted with EDGAR. They will need guidance on what Form 3 is, why they are filing it, and what the two-business-day Form 4 deadline means in practice. The SEC staff FAQ on the HFIA Act, available on the SEC's dedicated HFIA Act page, is the most practical resource for edge cases and should be part of any board orientation materials.

Monitor for further exemptive orders. The May 2026 second order added three jurisdictions that were not in the March order. The SEC has confirmed it may extend relief to additional jurisdictions. FPIs in currently non-qualifying jurisdictions should watch the SEC's HFIA Act page for updates.

FAQ

Does the Section 16 exemption for foreign private issuers still exist after 2025? The old blanket exemption under Rule 3a12-3(b) was eliminated by the HFIA Act, effective March 18, 2026. A conditional exemption now exists for directors and officers of FPIs incorporated in qualifying jurisdictions and personally subject to a qualifying home-country regulation, provided English-language reports are published within two business days.

Which jurisdictions qualify for the FPI Section 16 exemption in 2026? As of May 2026, qualifying jurisdictions are: Australia, Canada, Chile, the 30 countries of the European Economic Area, India, the Republic of Korea, Singapore, Switzerland, and the United Kingdom. The May 20, 2026 second order (Release No. 34-105517) added Australia, India, and Singapore.

Do 10% beneficial owners of FPIs have to file Section 16 reports? No. 10% beneficial owners of FPIs who are not directors or officers are fully exempt from Section 16 in its entirety, including Section 16(a) reporting. This is a statutory carve-out written into the HFIA Act.

Do FPI insiders face short-swing profit liability under Section 16(b)? No. Section 16(b) short-swing profit disgorgement and Section 16(c) short-sale prohibitions do not apply to FPI insiders. Only Section 16(a) reporting applies.

What if a director is incorporated in a qualifying jurisdiction but not personally subject to a qualifying regulation? That director must file Forms 3, 4, and 5 with the SEC. The exemption requires both conditions: the FPI must be in a qualifying jurisdiction AND the individual must personally be required to report under a qualifying regulation. Satisfying only one prong is not enough.

Can an FPI in a non-qualifying jurisdiction petition the SEC for relief? Yes. The SEC accepts nonpublic exemptive requests via a webform. Contact the Office of International Corporate Finance at CFHFIArequests@sec.gov or 202-551-3450 before submitting. FPIs should continue filing with the SEC while any petition is pending.