New U.S. law requires foreign private issuers to report insider trades

On December 18, 2025, the President of the United States, signed into effect the “National Defense Authorization Act for Fiscal Year 2026” (NDAA). This new law has implications for individuals within “foreign private issuers” (FPIs) with the implementation of the “Holding Foreign Insiders Accountable Act” under Section 8103. It extends the insider reporting requirements of Section 16 of the Exchange Act of 1934 to SEC reporting companies that fall under the FPI umbrella.

The law stipulates that this extension will apply to directors and select officers within these companies 90 days after its enactment, setting the deadline at March 18, 2026. While it is the responsibility of the individual insiders to comply with the reporting regulations, FPIs should outline these new requirements to their affected personnel. It is also advisable for companies to establish a reporting mechanism for securities trades and to provide support for filing compliance. Updating internal policies concerning insider trading is also recommended for FPIs to align with the new regulations.

Directors and officers anticipated to be affected should expedite the process of obtaining “EDGAR codes” necessary for electronic filings with the SEC. Due to the anticipated surge in demand for these codes, initiating this process early is advised. Instructions on this process can be accessed on the SEC website, with potential guidance from the company’s legal department. Involved parties should also prepare their initial Form 3 beneficial ownership statements to ensure timely filings before the March 18, 2026 deadline, possibly benefiting from further guidance from the SEC in the interim.

To comply with the new legislation, the SEC is mandated to establish new rules reflective of the changes. Market participants will be eager to learn how these new rules will address additional subjects like 10% shareholders of FPIs or the potential inclusion of directors and officers in the Section 16(b) short-swing liability provisions under the Securities Exchange Act. The status of non-U.S. issuers, specifically regarding exemptions, may depend on comparable reporting practices in their home jurisdictions, as well as updates to rules mandating the reporting of late Form 3, 4, or 5 filings by companies.

In the longer term, the increased transparency derived from the new reporting system, which broadens the range of information accessible to potential investors regarding ownership, equity grants, and trading activity, may prompt issuers to scrutinize and perhaps modify their equity compensation practices. While not all officers are subject to Section 16 filing regulations, the definition of “officer” in SEC Rule 16(a)(1) encompasses specific roles within a company’s hierarchy, thereby implicating certain key personnel in these newly extended reporting rules.