Effective March 18, 2026, foreign private issuers, or FPIs, will be subject to the reporting requirements under Section 16(a) of the Securities Exchange Act of 1934. Below, we outline what this means for FPIs, their officer and directors, and how you can get ready to comply.
What are Foreign Private Issuers?
FPIs are non-U.S. companies with shares that are listed on a U.S. exchange with most of their share ownership, management, and/or assets outside the United States.[1]
Will all FPIs be Subject to Section 16(a) Reporting?
The reporting requirement goes into effect on March 18, 2026, without any requirement that the Securities and Exchange Commission, or SEC, amend its rules. While the SEC has the ability to create exemptions from the reporting requirements, FPIs should not assume that it will provide any such exemptions prior to the effective date, if at all, and therefore should begin preparing to comply as soon as possible.
Who are an FPI’s Section 16 Reporting Persons?
All of an FPI’s directors will be Section 16 reporting persons. In addition, all of an FPI’s executive officers, plus certain other officers (depending on their role in the company) will also be Section 16 reporting persons.
| Officers | Directors |
| President | All members of the board of directors, whether or not they are employees |
| Principal financial officer | |
| Principal accounting officer or controller | |
| Any vice president in charge of a principal business unit, division, or function (i.e., sales, administration, or finance) | |
| Any other officer (including an officer of a subsidiary) or other person who performs similar policy-making functions |
Practice Tip: Boards of directors are tasked with determining the identity of an issuer’s Section 16 reporting persons. In doing so, an individual’s function and role are more determinative than title.
Practice Tip: While the determination is based on particular facts and circumstances, certain positions like general counsel / chief legal officer are often not considered Section 16 officers.
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[1] To determine if an issuer is an FPI, follow the steps below:
- Step 1: If the issuer is organized under a non-U.S. law, proceed to Step 2. If it is a U.S.-organized issuer, it cannot be an FPI.
- Step 2: Based on a “reasonable inquiry,” determine whether U.S. residents hold more than 50% of the issuer’s outstanding voting securities. If U.S. residents hold 50% or less, the issuer is an FPI. If more than 50%, go to Step 3.
- Step 3: If U.S. residents hold more than 50% of voting securities, the issuer is an FPI unless any one of the following is true:
- Board/management test: A majority of executive officers or directors are U.S. citizens or residents.
- Asset location test: More than 50% of the issuer’s assets are located in the U.S.
- Administrative test: The business is administered principally in the U.S. (i.e., primary managerial/administrative center is in the U.S.).