On December 18, 2025, President Trump signed the National Defense Authorization Act for Fiscal Year 2026, which — buried in the defense bill as Section 8103 — includes the Holding Foreign Insiders Accountable Act (“HFIAA”). The HFIAA represents a major change in U.S. securities law by expanding insider reporting obligations under Section 16(a) of the Securities Exchange Act of 1934 to officers and directors of foreign private issuers (“FPIs”).
Historically, directors and officers of FPIs listed on a U.S. national securities exchange or registered under Section 12 of the Exchange Act were exempt from Section 16(a) reporting under Exchange Act Rule 3a12-3 (see https://securities-law-blog.com/2024/10/08/foreign-private-issuers-sec-registration-and-reporting-and-nasdaq-corporate-governance-part-1/). The HFIAA eliminates that exemption, aligning the reporting requirements for certain FPI insiders with those long applicable to insiders of U.S. domestic issuers.
Section 16(a)
Section 16(a) of the Exchange Act is designed to provide timely public disclosure of ownership and transactions by corporate insiders to protect investors by increasing transparency. Under Section 16(a):
- Directors, officers, and beneficial owners of more than 10% of a class of a registered company’s equity securities must file Form 3 to disclose initial ownership upon becoming an insider.
- Subsequent changes in beneficial ownership must be reported on Form 4 within two business days of the transaction.
- Certain annual or deferred reports are filed on Form 5 within 45 days after fiscal year end.
Before the HFIAA, FPIs were exempt from these insider reporting requirements even if their securities traded in the United States.
Key Changes Under the HFIAA
Section 16(a) Reporting Applies to FPI Officers and Directors
Effective March 18, 2026 — 90 days after the HFIAA’s enactment — directors and officers of FPIs will be required to comply with Section 16(a) beneficial ownership and transaction reporting obligations just like insiders of U.S. issuers.
- Directors and officers must file Form 3 on March 18, 2026 disclosing all beneficial ownership of the FPI’s registered equity securities.
- New insiders after that date have 10 calendar days to file an initial Form 3.
- Transaction reporting on Form 4 will generally be due within two business days of a reportable transaction.
- Annual or deferred transaction reports go on Form 5.
Scope Is Narrower Than Some Prior Proposals
Although the HFIAA extends Section 16(a), it is narrower in scope than earlier legislative proposals:
- 10% beneficial owners of FPIs that are not directors or officers remain exempt from Section 16(a).
- FPIs’ insiders remain exempt from Section 16(b) short-swing profit liability and Section 16(c) short-sale restrictions (for more on the short-swing profit liability – see https://securities-law-blog.com/2014/06/30/section-16-insider-reporting-liability-short-swing-trading/).
Exemptions
The HFIAA grants the SEC authority to exempt insiders, securities, or transactions from Section 16(a) requirements if the laws of a foreign jurisdiction impose “substantially similar” reporting requirements. How the SEC will exercise this authority remains to be seen and may factor into future rulemaking.
Practical and Compliance Considerations
The HFIAA’s implementation will require FPIs and their insiders to adjust longstanding practices, including: (i) EDGAR Next Filing Credentials – directors and officers of FPIs will need EDGAR Next filing credentials before March 18, 2026. Obtaining these credentials can take time, so early preparation is critical; (ii) Determine Who Qualifies as an “Officer” – for Section 16 purposes, an “officer” is defined by Exchange Act Rule 16a-1(f) and encompasses key policy-making executives beyond traditional C-suite titles. FPIs will need to assess which individuals — including potential “directors by deputization” — may meet that definition; and (iii) Internal Reporting and Policies – FPIs should update insider trading policies and internal reporting procedures to ensure compliance with the tight timing and electronic filing requirements of Section 16(a).
Given potential SEC enforcement risk for late or inaccurate filings, robust internal controls will be essential. In that regard, FPI’s should consider granting a limited power of attorney to a designated officer to allow for the ongoing filing of Section 16 reports.
I have included a compliance checklist below in this blog.
Investor and Market Impact
The HFIAA aims to level the playing field for U.S. investors by ensuring that insiders of FPIs with securities trading in the U.S. are held to similar transparency standards as insiders of domestic issuers. This change responds to longstanding concerns that foreign insiders could leverage informational advantages when disclosures were delayed, incomplete, or exempt — particularly where foreign reporting regimes diverged from U.S. standards.
Conclusion
The Holding Foreign Insiders Accountable Act marks a significant shift in Section 16(a) insider reporting for foreign private issuers. With compliance required beginning March 18, 2026, FPIs and affected insiders must act now to evaluate reporting obligations, obtain necessary SEC filing credentials, and implement internal systems to meet the new requirements. While exemptions for larger owners and short-swing liability suggest a deliberate legislative balance, the Act underscores a broader policy objective: enhancing transparency and accountability for all issuers whose securities trade in U.S. markets.
The following checklist outlines key compliance steps.
- Confirm Applicability
☐ Confirm the company qualifies as a foreign private issuer
☐ Confirm the company has:
- equity securities registered under Section 12 of the Exchange Act or
- equity securities listed on a U.S. national securities exchange
☐ Confirm that the individual is:
- a director, or
- an officer within the meaning of Exchange Act Rule 16a-1(f)
Note: Titles alone are not determinative; the Rule 16 definition focuses on policy-making authority.
- Identify Covered Insiders
☐ Compile a list of all:
- board members
- executive officers
- individuals performing policy-making functions
- potential “directors by deputization”
☐ Determine whether any affiliates or entities could trigger deputization issues
☐ Confirm that 10% beneficial owners who are not officers or directors remain exempt
- Establish Initial Reporting Obligations (Form 3)
☐ For existing directors and officers as of the effective date:
- prepare Form 3 reporting all beneficial ownership of the issuer’s registered equity securities
☐ For new directors or officers appointed after the effective date:
- calendar 10 calendar days from appointment to file Form 3
☐ Review beneficial ownership rules, including:
- indirect ownership
- family members and controlled entities
- equity awards and derivative securities
- Prepare for Ongoing Transaction Reporting (Form 4)
☐ Implement procedures to identify reportable transactions, including:
- open market purchases and sales
- option grants and exercises
- restricted stock grants and vesting
- gifts and transfers
- transactions under Rule 10b5-1 plans
☐ Calendar the two business day Form 4 filing deadline
☐ Establish internal notification requirements so insiders promptly report transactions to compliance personnel
- Annual and Deferred Reporting (Form 5)
☐ Identify transactions eligible for deferred reporting
☐ Calendar Form 5 filing deadline:
- 45 days after fiscal year-end
☐ Confirm whether any transactions were inadvertently missed during the year
- EDGAR and Filing Logistics
☐ Ensure all covered insiders obtain EDGAR Next credentials
☐ Confirm insiders have:
- CIK numbers
- passphrases
- appropriate power of attorney arrangements (if filings are made on their behalf)
☐ Test filing processes in advance of the first required submission
- Update Internal Policies and Controls
☐ Update insider trading policies to reflect:
- Section 16(a) reporting obligations
- accelerated filing deadlines
☐ Adopt or revise:
- Section 16 compliance policies
- internal transaction reporting forms
- pre-clearance procedures (if applicable)
☐ Train directors and officers on:
- what transactions are reportable
- timing requirements
- consequences of late or inaccurate filings
- Monitor Potential SEC Exemptions
☐ Evaluate whether the issuer or insiders may qualify for:
- SEC exemptions based on “substantially similar” foreign reporting regimes
☐ Monitor SEC guidance or rulemaking interpreting the HFIAA
- Disclosure and Liability Considerations
☐ Establish procedures to:
- monitor timely filings
- correct errors promptly
- amend filings when necessary
☐ Remember:
- insiders of FPIs remain exempt from Section 16(b) short-swing profit liability
- insiders remain exempt from Section 16(c) short-sale prohibitions
☐ Nevertheless, late filings may result in:
- SEC enforcement action
- reputational risk
- disclosure issues in periodic reports
- Ongoing Compliance Review
☐ Conduct periodic reviews of:
- insider lists
- officer status
- equity compensation programs
☐ Reassess compliance upon:
- management changes
- board changes
- new equity offerings or compensation plans
The Author
Laura Anthony, Esq.
Founding Partner
Anthony, Linder & Cacomanolis
A Corporate and Securities Law Firm
Securities attorney Laura Anthony and her experienced legal team provide ongoing corporate counsel to small and mid-size private companies, public companies as well as private companies going public on the Nasdaq, NYSE American or over-the-counter market, such as the OTCQB and OTCQX. For more than two decades Anthony, Linder & Cacomanolis, PLLC has served clients providing fast, personalized, cutting-edge legal service. The firm’s reputation and relationships provide invaluable resources to clients including introductions to investment bankers, broker-dealers, institutional investors and other strategic alliances. The firm’s focus includes, but is not limited to, compliance with the Securities Act of 1933 offer sale and registration requirements, including private placement transactions under Regulation D and Regulation S and PIPE Transactions, securities token offerings and initial coin offerings, Regulation A/A+ offerings, as well as registration statements on Forms S-1, S-3, S-8 and merger registrations on Form S-4; compliance with the Securities Exchange Act of 1934, including registration on Form 10, reporting on Forms 10-Q, 10-K and 8-K, and 14C Information and 14A Proxy Statements; all forms of going public transactions; mergers and acquisitions including both reverse mergers and forward mergers; applications to and compliance with the corporate governance requirements of securities exchanges including Nasdaq and NYSE American; general corporate; and general contract and business transactions. Ms. Anthony and her firm represent both target and acquiring companies in merger and acquisition transactions, including the preparation of transaction documents such as merger agreements, share exchange agreements, stock purchase agreements, asset purchase agreements and reorganization agreements. The ALC legal team assists Pubcos in complying with the requirements of federal and state securities laws and SROs such as FINRA for 15c2-11 applications, corporate name changes, reverse and forward splits and changes of domicile. Ms. Anthony is also the author of SecuritiesLawBlog.com, the small-cap and middle market’s top source for industry news, and the producer and host of LawCast.com, Corporate Finance in Focus. In addition to many other major metropolitan areas, the firm currently represents clients in New York, Los Angeles, Miami, Boca Raton, West Palm Beach, Atlanta, Phoenix, Scottsdale, Charlotte, Cincinnati, Cleveland, Washington, D.C., Denver, Tampa, Detroit and Dallas.
Ms. Anthony is a member of various professional organizations including the Crowdfunding Professional Association (CfPA), Palm Beach County Bar Association, the Florida Bar Association, the American Bar Association and the ABA committees on Federal Securities Regulations and Private Equity and Venture Capital. She is a supporter of several community charities including the American Red Cross for Palm Beach and Martin Counties, Susan Komen Foundation, Opportunity, Inc., New Hope Charities, the Society of the Four Arts, the Norton Museum of Art, Palm Beach County Zoo Society, the Kravis Center for the Performing Arts and several others.
Ms. Anthony is an honors graduate from Florida State University College of Law and has been practicing law since 1993.
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