U.S. SEC Grants Exemption From Section 16(a) Reporting Obligations to Directors and Officers of Certain Foreign Private Issuers

On March 5, 2026, the U.S. Securities and Exchange Commission (SEC) issued an order exempting the directors and officers of certain foreign private issuers (FPI) from the reporting requirements under Section 16(a) of the Exchange Act.

As a reminder, pursuant to the Holding Foreign Insiders Accountable Act (the HFIA Act), Section 16(a) reporting obligations (Forms 3, 4, and 5) apply to directors and officers of FPIs with a class of equity securities registered under Section 12 of the Exchange Act beginning on March 18, 2026 (with Forms 3 due that day). Notably, under the HFIA Act, 10% beneficial owners of FPIs remain exempt from Section 16(a) reporting obligations, and all FPI insiders remain exempt from Section 16(b) short-swing profit liability and Section 16(c) short-sale restrictions.

With under two weeks until the compliance date, the SEC granted broad exemptive relief from the HFIA Act to directors and officers of any FPI that is (i) incorporated or organized in a “qualifying jurisdiction” and (ii) subject to a “qualifying regulation,” subject to two additional conditions.

The “qualifying jurisdictions”:

• Canada
• Chile
• the European Economic area, which consists of the 27 member states of the European Union as well as Iceland, Liechtenstein, and Norway
• the Republic of Korea
• Switzerland
• the United Kingdom

The “qualifying regulations,” respectively:

• Canada National Instrument 55-104 — Insider Reporting Requirements and Exemptions (supported by National Instrument 55-102 — System for Electronic Disclosure by Insiders and companion policies)
• Articles 12, 17, and 20 of the Chilean Securities Market Law (Ley de Mercado de Valores, Ley No. 18,045) and General Rule (Norma de Carácter General) No. 269
• Article 19 of the European Union Market Abuse Regulation (Regulation (EU) No. 596/2014, as amended by Regulation (EU) No. 2024/2809) (including, as applicable, implementing legislation and regulations adopted by the European Union member states) and as incorporated into the domestic law of each European Economic Area state (EU MAR)
• Article 173 of the Republic of Korea Financial Investment Services and Capital Markets Act and Article 200 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act
• Article 56 of the Listing Rules and implementing directives of SIX Swiss Exchange as approved by the Swiss Financial Market Supervisory Authority
• Article 19 of the United Kingdom Market Abuse Regulation (Regulation (EU) No. 596/2014), as it forms part of United Kingdom domestic law pursuant to the European Union (Withdrawal) Act 2018

An FPI can be subject to a qualifying regulation in a different jurisdiction than the qualifying jurisdiction in which the FPI is incorporated or organized; for example, a Canadian-incorporated company whose securities trade in Germany subject to Article 19 of the EU MAR should qualify for the exemptive relief. However, even if an FPI is subject to a qualifying regulation (e.g., if its securities are listed in a qualifying jurisdiction), the exemptive relief does not apply to its directors and officers if the FPI is not incorporated or organized in a qualifying jurisdiction.

The exemptive relief is also subject to two additional conditions:

(1) Any director or officer seeking to rely on the exemption is required to report their transactions in the FPI’s securities as set forth under the qualifying regulation to which they are subject (i.e., if an officer or director subject to Section 16(a) is not required to report their transactions under the qualifying regulation, they would continue to be subject to Section 16(a) reporting)

(2) Any report filed pursuant to a qualifying regulation must be made available in English to the general public within no more than two business days of its public posting. If an English version of the report cannot be filed through the regulator’s online database, then this condition could be met by making the report available on the FPI’s website.

FPIs and their directors and officers that do not qualify for the SEC’s exemptive relief should continue to prepare for the implementation of the reporting requirements by the March 18, 2026, effective date. This includes implementing appropriate internal compliance procedures and ensuring they are enrolled in the SEC EDGAR Next system, which is required to file Section 16 reports with the SEC.