U.S. legislation enacted to extend insider reporting to foreign private issuers

On December 18, 2025, U.S. President Trump signed into law the "National Defense Authorization Act for Fiscal Year 2026" (the "NDAA"). Our recent client alert, available here, discusses the implications of this law as to insiders of "foreign private issuers" ("FPIs").

Section 8103 of the new law, entitled the "Holding Foreign Insiders Accountable Act," extends the insider reporting provisions of Section 16 of the Exchange Act of 1934 relating to share ownership to SEC reporting companies that are FPIs.

By its terms, the new law applies to directors and certain officers of these companies as of the 90th day after its enactment, on March 18, 2026. The requirements are self-effectuating without further SEC action, even though the statute does require the SEC to adopt new rules to effect the amendments.

Required Action Items

Management of FPIs should identify the individuals who serve as officers¹ and directors and who, accordingly, are subject to the new provisions. Even though the filing requirements rest on the shoulders of the individuals, and not the companies, the FPIs should communicate the new reporting requirements to these individuals. These companies may also wish to consider organizing a system (a) to ensure that relevant trades of the company's securities are reported to management and (b) to provide support to these individuals to effect the required filings. FPIs may also wish to update their insider trading and related policies to reflect the application of the new provisions.

The applicable directors and officers should begin the process of obtaining "EDGAR codes," which are used to file documents electronically with the SEC. Due to the increased demand for these codes that will arise from the new statute, we recommend that this process commence as early as possible. Instructions for this purpose can be obtained on the SEC website, including access to a video presentation. A company's in-house counsel can often provide useful guidance to the relevant individuals.

Directors and officers will want to begin the process of preparing their initial Form 3 statement of beneficial ownership. Accordingly, since the new statute becomes effective on March 18, 2026, relevant directors and officers should position themselves to effect their initial filing on or prior to that date. Of course, it is possible that the SEC will provide additional guidance as to the preparation of initial filings.

New SEC Rules

The statute requires the SEC to adopt new rules to reflect the new statute. Market participants will be looking to the SEC's proposed rules as to a variety of questions, including:

• Will the SEC attempt to subject additional persons, such as 10% shareholders of FPIs, to the new filing requirements?
• Will the SEC attempt to subject directors and officers to the short-swing liability provisions of Section 16(b) under the Securities Exchange Act? (Under the statute, the SEC is not required to do so.)
• Will any non-U.S. issuers be exempt from the new requirements, because their home jurisdictions are determined to have comparable reporting regimes?
• Will the SEC update any of its rules to require companies to report late filings of Forms 3, 4 or 5?

In the Longer Term…

FPIs are currently required to report only limited information about the equity compensation granted to their directors and executive officers.² Under the new reporting system, more information will be available to investors about their ownership, equity awards, and trading activities. This greater transparency may encourage some issuers to consider whether their equity compensation practices are appropriate.