SEC Adopts Final Rules Under HFIA Act to Boost Foreign Insider Transparency

TLDR:

• The HFIA Act was enacted on December 18, 2025, mandating SEC action within 90 days of enactment.
• FPI directors and officers must file Section 16 reports electronically and in English by March 18, 2026.
• The SEC removed the blanket Section 16 exemption, replacing it with narrower short-swing and short-selling carve-outs.
• Ten percent beneficial owners of FPI equity securities are excluded from the new Section 16(a) reporting rules.

The HFIA Act has prompted the Securities and Exchange Commission to adopt final rule and form amendments under Section 16 of the Securities Exchange Act of 1934.

These changes require directors and officers of foreign private issuers to disclose their holdings and transactions in equity securities.

The rules take effect on March 18, 2026. This move follows the enactment of the Holding Foreign Insiders Accountable Act on December 18, 2025, bringing greater transparency to FPI insider activity.

SEC Revises Section 16 Rules for Foreign Private Issuers

The HFIA Act amended Section 16(a) of the Exchange Act to expand reporting requirements. Directors and officers of FPIs with equity securities registered under Section 12 are now subject to these rules.

However, the law excludes “10 percent holders” who beneficially own more than 10 percent of any class of FPI equity securities.

Under the revised rules, covered insiders must file Section 16 reports electronically and in English. This requirement marks a clear shift from prior exemptions that FPI insiders previously enjoyed.

As a result, the reporting process becomes more standardized and accessible to U.S. investors.

The SEC amended Rule 3a12-3(b) to remove the existing blanket exemption from Section 16 entirely. In its place, the rule now provides narrower exemptions. These cover only the Section 16(b) short-swing profit rules and the Section 16(c) short selling prohibition.

Additionally, Rule 16a-2 was updated to formally exclude 10 percent holders of FPI equity securities from Section 16(a) requirements.

This exclusion ensures that minority beneficial owners are not swept into the new reporting framework. The change also aligns the rule text with the statutory language of the HFIA Act itself.

Reporting Deadlines and Compliance Timeline Under the HFIA Act

The HFIA Act set a firm deadline for the SEC to act. The Commission was required to issue final regulations no later than 90 days after the December 18, 2025 enactment date. The SEC met that mandate by adopting these amendments ahead of the March 18, 2026 effective date.

Directors and officers of qualifying FPIs must begin filing Section 16 reports starting March 18, 2026. This date serves as both the statutory effective date and the compliance start point.

Covered insiders should therefore prepare their disclosure systems well before that deadline.

The rule changes also revise the relevant Section 16 report forms to reflect the new requirements. These form updates ensure that the reporting structure matches the amended statutory framework. Moreover, they provide clarity on what information FPI insiders must include in each filing.

The SEC’s action brings FPI insiders closer in line with domestic reporting standards. This regulatory alignment gives investors better visibility into the trading activity of foreign company insiders. It also strengthens the overall integrity of U.S. equity markets.

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