As discussed in our Dec. 23, 2025, GT Alert, Congress enacted the Holding Foreign Insiders Accountable Act (HFIAA), which extended Section 16(a) beneficial ownership reporting obligations under the Securities Exchange Act of 1934 (Exchange Act) to directors and officers of foreign private issuers (FPIs). The HFIAA allowed the SEC to exempt any person or security subject to “substantially similar requirements” in a foreign jurisdiction. On March 5, 2026, the SEC issued an Order granting limited relief and providing an exemption from Section 16(a) reporting requirements to directors and officers of FPIs incorporated in certain jurisdictions.
SEC Exemption Requirements for FPI Directors and Officers
The order applies to directors and officers of FPIs incorporated or organized in a “qualifying jurisdiction” and subject to a “qualified regulation” who meet the following conditions:
- The director or officer must report under the applicable qualifying regulation of that jurisdiction.
- The reports must be made publicly available in English within two business days of its public posting. If the reports are not published in English on the applicable regulator’s online database, then FPIs should make the reports available in English on the company website.
Which Are the Qualifying Jurisdictions?
- Canada,
- Chile,
- the European Economic Area,
- the Republic of Korea,
- Switzerland, and
- United Kingdom.
What Are the Qualifying Regulations?
The FPI must be subject to any of the following regulations (including any successor regulations that are materially the same as these regulations), even if such regulation is in a jurisdiction other than its qualifying jurisdiction:
- Canada’s National Instrument 55-104 – Insider Reporting Requirements and Exemptions (supported by National Instrument 55-102 – System for Electronic Disclosure by Insiders (SEDI) and companion policies).
- Articles 12, 17, and 20 of the Chilean Securities Market Law (Ley de Mercado de Valores, Ley No. 18,045) and General Rule (Norma de Carácter General) No. 269.
- Article 19 of the European Union Market Abuse Regulation (Regulation (EU) No. 596/2014, as amended by Regulation (EU) No. 2024/2809) (and any implementing legislation and regulations adopted by the European Union’s Member States) as incorporated into the domestic law of each European Economic Area state (EU MAR). The order notes that any country that joins the EEA would also be required to adopt EU MAR for the exemptive relief to apply to directors and officers of its FPIs. Conversely, a country that leaves the EEA may no longer be subject to EU MAR, and in that case, directors and officers of its FPIs would no longer be eligible for the exemptive relief.
- Article 173 of the Republic of Korea Financial Investment Services and Capital Markets Act and Article 200 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act.
- Article 56 of the Listing Rules and implementing directives of SIX Swiss Exchange, as approved by the Swiss Financial Market Supervisory Authority.
- Article 19 of the United Kingdom Market Abuse Regulation (Regulation (EU) No. 596/2014), as it forms part of United Kingdom domestic law pursuant to the European Union (Withdrawal) Act 2018.
Potential Implications of the SEC’s FPI Reporting Exemption Order
- While the exemption applies regardless of where the FPI’s securities are listed, it is important to note that the exemption is contingent upon where the FPI is incorporated or organized. Therefore, directors and officers of an FPI that is listed in a qualifying jurisdiction, but incorporated or organized in a non-qualifying jurisdiction, will not be able to avail themselves of the relief. For example, an FPI incorporated in Cayman that is listed in the United Kingdom and fully subject to UK MAR would still notget the benefit of the exemptive relief.
- To reiterate, the exemption is available for so long as an FPI is subject to a qualifying regulation and is incorporated or organized in a qualifying jurisdiction. Both conditions need to be true in order for the relief to be available. However, issuers can “mix-and-match” jurisdictions for this purpose. For example, directors and officers of an FPI incorporated in Switzerland (a qualifying jurisdiction) that is subject to EU MAR (qualifying regulation) are exempt, even if they are not subject to the Swiss insider reporting regime. But, if the FPI that is incorporated in Switzerland (qualifying jurisdiction) redomiciles to a non-qualifying jurisdiction, its directors and officers would no longer be eligible for the exemption, even if the FPI remains subject to EU MAR.
- Furthermore, if an FPI is incorporated in a qualifying jurisdiction (eg: Luxembourg) but is not listed on any other non-US exchange and thus no other home country reporting rules apply and no “qualifying regulations” apply, the issuer will still not be eligible for any relief under the Order. This is particularly relevant since many FPIs from qualifying jurisdictions are listed exclusively in the U.S.
Implementation Considerations for FPIs Following Section 16(a) Exemption
While the order provides limited relief from the HFIAA, the application of the order requires an individualized assessment on a case-by-case basis. The order is not a one-size fits all and companies should consider various nuances before making a determination. For example, certain officers of an issuer may be subject to reporting under Section 16(a) but may not be required to file reports under the FPI’s qualifying regulation (e.g., persons discharging managerial responsibilities under EU MAR and engaging in transactions not triggering the reporting threshold set by the national regulator). In such circumstances, an FPI may need to determine whether to align its home-country reporting group with individuals qualifying as directors or officers for Section 16(a) purposes (if allowed by the applicable qualifying regulation), in order to avoid a scenario where the individuals who are not subject to filing requirements under such qualifying regulation be required to make Section 16(a) filings commencing on March 18, 2026.
The underlying intent of the order is to avoid duplicative regulatory filings while maintaining transparency for investors. The order makes clear that the SEC might revisit its analysis if any changes to the qualifying regulations or otherwise are sufficiently material “such that the qualifying regulations are no longer substantially similar to the requirements of Section 16(a).”
Directors and officers of FPIs incorporated outside the qualifying jurisdictions or not subject to qualifying regulations remain subject to the beneficial ownership reporting requirements commencing March 18, 2026, unless the SEC grants further relief.