Section 16 Insider Reporting to Apply to Foreign Private Issuers Beginning March 18, 2026

Overview and Effective Date

Effective March 18, 2026, directors and officers of U.S.-listed companies that qualify as foreign private issuers (FPIs) will be required to publicly report their equity holdings and transactions pursuant to Section 16(a) of the Securities Exchange Act of 1934 (Exchange Act). This change stems from Congress’ passage of the National Defense Authorization Act for Fiscal Year 2026 (NDAA), which President Trump signed into law on December 18, 2025.

Background and Scope of Amendments

Section 16(a) requires directors, officers, and beneficial owners of more than 10% of a registered class of equity securities to file public reports with the U.S. Securities and Exchange Commission (SEC) on Forms 3, 4, and 5 disclosing their equity holdings and transactions. Although the statutory provision applies broadly to companies with securities registered under Section 12 of the Exchange Act, the SEC has historically exempted FPIs. That exemption has long been viewed as a key benefit of FPI status for foreign companies accessing the U.S. capital markets. The NDAA applies the requirements of Section 16(a) to directors and executive officers. However, it does not extend applicability to more than 10% shareholders of FPIs. 

The NDAA amends only Section 16(a), which governs insider reporting, and does not extend the other provisions of Section 16 to foreign private issuers. Of particular note, while Sections 16(b) and 16(c) address short-swing profit recovery and short-sale restrictions, respectively, the NDAA does not subject directors or officers of FPIs to those provisions, and FPIs remain exempt from Section 16(b) and 16(c) under existing SEC rules. Any future extension of Sections 16(b) or 16(c) to FPIs are expected to require additional legislative action or SEC rulemaking.

Reporting Obligations and Timing

Under the amendments, directors and officers of FPIs will be required to file an initial Form 3 disclosing their equity holdings on March 18, 2026. Directors and officers who become subject to Section 16 after that date will generally be required to file a Form 3 within 10% calendar days of becoming an insider.

Thereafter, most equity transactions, including open-market trades and equity compensation-related transactions (e.g., equity award grants, option exercises, sell to cover transactions and tax withholdings), must be reported on Form 4 within two business days. When applicable, directors and officers of FPIs will also be required to report certain previously unreported transactions on Form 5 within 45 days after the end of the applicable fiscal year.

EDGAR Next Considerations

The transition to the SEC’s upgraded Electronic Data Gathering, Analysis, and Retrieval system (EDGAR Next) may complicate implementation of these new requirements for FPIs, particularly for directors and officers who do not already have active EDGAR Next credentials.. Obtaining filing access can take several weeks and should be addressed well in advance of the effective date.

Next Steps

While FPIs await further guidance from the SEC, companies should begin preparing now by identifying which members of management qualify as “executive officers” for Section 16 purposes, confirming that each director and executive officer has active EDGAR access codes, and reviewing insider trading and pre-clearance policies to ensure that transactions by directors and officers are reported internally on a timely basis. FPIs should also consider providing targeted training to directors and officers who may not previously have been subject to Section 16 reporting, particularly in light of the possibility that short-swing profit liability could be extended to directors and executive officers of FPIs in the future. FPIs should also establish a clear, documented internal process for preparing, reviewing, and filing the forms. This process should include assigning responsible personnel, coordinating draft reviews with outside counsel when appropriate, and ensuring that all participants are trained on the relevant Section 16 reporting requirements to support timely and accurate filings.

We are available to advise companies on the application of the Section 16 reporting requirements, including assisting with Section 16 officer determinations, supporting the development of appropriate reporting processes, and answering questions regarding EDGAR Next enrollment.

Subscribe To Viewpoints