The 2025 Defense Appropriations bill included an unexpected new requirement for officers and directors of foreign companies that report with the Securities and Exchange Commission (“SEC”). The Holding Foreign Insiders Accountable Act (“HFIAA”) requires applicable individuals of Foreign Private Issuers (“FPIs”) to comply with Section 16 of the 1934 Act, beginning March 18, 2026. The new requirements will enhance the transparency of insider transactions for FPIs and extend the parity in public reporting between FPIs and domestic issuers. The act allows the SEC to create exemptions or modify the requirements mandated by Congress.
Affected filers/reporting owners
- Directors
- Officers
- Ten-percent Owners are exempt (while ten-percent owners for U.S. based public companies are required to file Section 16 reports)
Compliance timing
Congress chose to directly amend the Exchange Act with this law, which requires the SEC to modify Rule 3a12-13(b) of the 1934 Act that currently exempts FPIs from Section 16 reporting. The new FPI reporting requirements will become effective on March 18, 2026 (90 days after the act was enacted). The SEC confirmed the compliance date and encourages filers to prepare soon.
From a practical standpoint, each reporting owner who do not currently have beneficial ownership reporting obligations will need to file an initial Form 3 on March 18. This will be a significant volume of new filers and Section 16 filings on March 18. If filers have not reported with the SEC before, then they will need to apply for EDGAR access by submitting a Form ID application to the SEC.
Timing is a critical consideration:
- Form 3: Due within ten calendar days of becoming an officer or director (for existing officers and directors, the due date of the Form 3 is March 18, 2026)
- Form 4: Due two business days after the transaction(s) being reported
- Form 5: Due within forty-five days after the issuer’s fiscal year end
Unlike most filings, Section 16 forms can be filed until 10 pm ET and receive the same day’s filing date.
Form ID
The SEC takes an average of six business days to review and approve a Form ID application. Additionally, with the recent launch of EDGAR Next, unenrolled filers may need to submit a Form ID application to restore electronic access, increasing the number of requests for staff to review. The new requirements add a significant number of new filer Form ID applications for SEC review, so filers should ensure they have EDGAR codes as soon as possible.
Here are five helpful tips and questions to determine if a filer needs to submit a Form ID.
- Confirm if your officers and directors have filed with the SEC before and have an existing CIK.
- Search SEC.gov and the EDGAR Company Database for the filer.
- If the filer does have a CIK, was the filer enrolled in EDGAR (Next)?
- If the filer was enrolled in EDGAR Next and you do not know the administrators, please check with the filer.
- If a filer has a CIK and was not enrolled, then a Form ID must be filed to restore electronic access to the existing CIK.
- For directors, do they report with another company that files with the SEC? If yes, then coordinate EDGAR access with the other company/issuer.
- If an officer or director has never filed with the SEC, then submit a Form ID for new CIK/applicant.
Section 16 reporting nuances
In the past few years, the SEC has increasingly adopted structured data reporting, both Inline XBRL and XML. Structured data improves efficiencies for both filers and regulators. Most ownership forms, including Section 16, Form 144, Schedule 13D/G, among others, are in XML format (eXtensible Markup Language). Issuers primarily manage Section 16 filings for their insiders, though the compliance responsibility remains with the individual officer or director. The intricacies of Section 16 reporting will be a learning curve for FPIs and their insiders. Given the short deadlines involved, particularly for Form 4 filings, FPIs should prepare in advance to be ready to report in a timely and accurate manner.
XML filings include fields with specific formatting parameters to ensure more accurate reporting, such as numeric values for prices and date fields to report the transaction timing. Review the SEC’s Form 3 and Form 4 layout, the SEC instructions for Form 3 and Form 4, and field requirements to avoid technical issues. For example, some fields in Tables 1 and 2 can be left blank if a footnote is included. Text fields have character limits. A Form 3 may be filed with Table 1 and 2 blank when the filer has no securities that are beneficially owned.
Increased alignment in SEC Reporting
Federal regulators and Congress may be focused on aligning reporting more between Foreign Private Issuers and domestic issuers. FPIs were previously not required to comply with Section 16 filings. Additionally, they are not required to file proxy statements or quarterly reports with the SEC. In June 2025, the SEC issued a concept release regarding the FPI definition and requested public comments. The release has prompted significant public comment from the filing community and may signal more changes for FPI reporting in the future. Foreign Private Issuers should be alert to future SEC regulation changes.
Resources
- Holding Foreign Insiders Accountable Act
- SEC announcement
- Toppan Merrill resources
- Form ID instructions:
How Toppan Merrill can help
Toppan Merrill is here to help you comply with the Section 16 requirements for Foreign Private Issuers. Contact us at [email protected] or 800.688.4400 to speak with one of our dedicated SEC Reporting experts.
