Here’s an important update from Alan, posted on his blog for members of Section16.net yesterday:

On Friday, the SEC adopted amendments to its rules and forms to conform them to the Holding Foreign Insiders Accountable Act (HFIAA), which requires directors and officers of foreign private issuers (FPIs) with a class of equity securities registered under Section 12 of the Exchange Act to report their holdings of and transactions in the issuer’s equity securities (electronically and in English) beginning March 18, 2026.

As expected, the SEC amended Rule 3a12-3(b), which currently exempts FPIs from all of Section 16, to limit the exemption to Section 16(b), the short-swing profit rule, and Section 16(c), the short-sale prohibition. The SEC also (1) amended Rule 16a-2, which identifies the persons and transactions subject to Section 16, to provide that ten percent owners of FPIs are not subject to Section 16(a), (2) amended General Instruction 1 to Form 3, which identifies the persons required to file Form 3, to include directors and officers of FPIs and exclude ten percent owners, and (3) amended Forms 3, 4 and 5 to allow Box 1 to include a postal code or country code rather than a zip code and add a new box following the “Issuer Name” box to allow inclusion of a foreign trading symbol. A list of country codes is available on the SEC’s website.

While Section 16 reporting persons will continue to be required to enter the issuer’s name and ticker or trading symbol in Box 3 of Form 3 and Box 2 of Forms 4 and 5, a new optional field (Box 3a. of Form 3 and Box 2a. of Forms 4 and 5) allows insiders of FPIs with securities trading in both US and non-US markets to provide a second trading symbol if they hold shares that are traded in both markets. Where securities have only a foreign trading symbol, insiders may either enter the foreign trading symbol in the first mandatory box (if space allows) or enter “none” in that box and enter the foreign trading symbol in the new second box. While the SEC has not yet posted updated versions of Forms 3, 4 or 5, we have updated our model Form 3 for directors and officers of FPIs to report their initial holdings as of March 18, 2026 (see Model Form 7a in the online version of the Forms & Filings Handbook) to reflect the amendments to Form 3.

The SEC clarified that language in Rule 16a-3(g)(1) and (f)(1) and the Instructions to Forms 4 and 5 establishing reporting requirements for transactions exempted from Section 16(b) should not be read to exempt directors and officers of FPIs from reporting transactions otherwise required by Section 16(a) based on the inapplicability of Section 16(b) to FPIs. The release also notes that directors and officers of FPIs should use the transaction codes listed in the Instructions for Forms 4 and 5, including those applicable to transactions qualifying for an exemption from Section 16(b), even though directors and officers of FPIs are not subject to Section 16(b).

Recognizing that some FPIs have a two-tier board structure — with a supervisory (non-management) board and a management board — the SEC also noted that irrespective of instructions in Form 20-F specifying that for some purposes the term “board of directors” refers only to the supervisory or non-management board, Section 3(a)(7) sets forth the definition of a “director” for purposes of the Section 16(a), and whether a person is a “director” for purposes of Section 16(a) should be determined using that definition.

Chair Atkins issued a statement indicating that the SEC is still evaluating whether to exercise the authority granted by the HFIAA to exempt persons, securities, or transactions from Section 16(a) because foreign laws already impose substantially similar requirements.

Commissioner Mark Uyeda issued a separate statement offering his views regarding why the HFIAA should not be construed to apply to ten percent owners.

We’re posting memos in our “Foreign Private Issuers” Practice Area, but for all things Section 16, you need Section16.net, where you can electronically access the “bibles” of Section 16 (Romeo & Dye’s Section 16 Forms & Filings Handbook, including the model Form 3 for D&Os of FPIs noted above, and Romeo & Dye’s Section 16 Treatise and Reporting Guide), follow and subscribe to Alan’s blog on Section 16 developments and practical tidbits, access the Q&A forum moderated by Alan, join Alan’s annual webcast and more. And for a cost-effective way to make Section 16 filings, check out the Romeo & Dye Section 16 Filer. If you are not a member of Section16.net, reach out to info@ccrcorp.com or call 1.800.737.1271 to subscribe to this essential resource.

– Meredith Ervine