In a significant development for foreign private issuers (FPIs), on December 18, 2025, President Trump signed into law the “National Defense Authorization Act for Fiscal Year 2026”, which requires directors and officers of FPIs with SEC-registered equity securities to file beneficial ownership and transaction reports with the SEC under Section 16(a) of the Securities Exchange Act of 1934. This represents a significant change, as insiders at FPIs were previously not subject to these reporting obligations. These officer and director obligations are intended to mirror the disclosure requirements that currently apply to officers and directors of companies that file as U.S. domestic issuers. Notably, the law does not apply Section 16(b) (liability for short-swing trades) to officers and directors of FPIs. The change becomes effective March 18, 2026, and the SEC is required by that date to promulgate regulations to implement the new requirements.
Below is a short summary of the reporting requirements that will apply and next steps to take:
Reporting requirements
- Form 3 (Initial Statement of Beneficial Ownership). Form 3 is used to report an insider’s initial beneficial ownership position and must be filed within 10 calendar days of a person becoming a director or officer (or otherwise becoming subject to the reporting rules).
- Form 4 (Statement of Changes in Beneficial Ownership). Form 4 is used to report most transactions that result in a change in beneficial ownership (for example, purchases or sales, and certain equity award and derivative security transactions). The reporting requirements also apply to transactions on foreign stock exchanges. Form 4 must be filed within two business days after the reportable transaction occurs.
- Form 5 (Annual Statement of Changes in Beneficial Ownership). Form 5 is used to report certain transactions that were eligible for deferred reporting or were not reported on a timely Form 4. Form 5 is generally due within 45 days after the issuer’s fiscal year-end.
Next steps
- Identify required filers. Determine which officers are required to file beneficial ownership reports under the SEC’s Section 16 rules.
- Obtain EDGAR Next filing codes. Confirm that each required filer has the necessary EDGAR Next filing codes to submit Forms 3, 4, and 5, and allocate sufficient time in advance to obtain and activate those codes. Note that after the recent prolonged U.S. government shutdown, there is a backlog at the SEC that has resulted in delays in the issuance of filing codes.
- Establish internal compliance processes. Implement internal procedures to assist directors and officers to satisfy their reporting obligations promptly and meet the required filing deadlines (including appropriate coordination among legal, finance, HR, and the relevant insiders).
The content in this update is provided for informational purposes only and is not intended to be comprehensive. It does not serve to replace professional legal advice required on a case by case basis.
