Section 16 Foreign Private Issuers: What the HFIAA Changed

If you hold shares of Alibaba, JD.com, or any other foreign company listed on a U.S. exchange, you’ve been operating at an information disadvantage for years. Under the old rules, officers and directors of foreign private issuers— the SEC’s term for non-US companies listed on American exchanges — were completely exempt from Section 16 of the Securities Exchange Act of 1934. That meant no Form 3, no Form 4, no Form 5. Insiders could trade freely with zero public disclosure to U.S. markets.

The Holding Foreign Insiders Accountable Act (HFIAA) ended that exemption. Signed into law on December 18, 2025 as part of the National Defense Authorization Act for Fiscal Year 2026, it required every director and officer of an FPI with Exchange Act-registered securities to start filing on EDGAR beginning March 18, 2026. For investors who track insider activity as a signal, this is the biggest expansion of publicly available data in a generation.

This post is written for investors, not compliance teams. It explains what actually changed, who is now required to report, what the new filings look like on EDGAR, and — critically — what the caveats are before you start treating every FPI Form 4 as equivalent to a domestic insider signal.

The Blind Spot That Just Closed

Section 16 of the Securities Exchange Act of 1934 is one of the bedrock disclosure rules in U.S. securities law. For domestic companies, it requires officers, directors, and 10%-plus shareholders to publicly report every trade in company stock within two business days. The entire premise of tracking insider buying — the signal that academic research has shown to predict positive returns — rests on this disclosure requirement.

But for the roughly 900 foreign companies listed on U.S. exchanges, that requirement simply did not apply. Under a longstanding SEC rule, FPI-registered securities were broadly exempt from all of Section 16. Directors and officers of FPIs had no reporting obligations whatsoever — not to EDGAR, not to U.S. investors, not anywhere in the U.S. regulatory system.

The practical consequence: if the CFO of a Chinese technology company listed on Nasdaq sold $50 million of stock the week before a bad earnings release, no U.S. disclosure was required. If the CEO of a UK pharmaceutical company listed on NYSE bought $10 million of shares ahead of positive clinical trial results, no Form 4 would ever appear on EDGAR. This created an information asymmetry between insiders of foreign-listed companies and the domestic investors who held their shares on U.S. exchanges. The HFIAA is Congress’s answer to that asymmetry.

What Is a Foreign Private Issuer — and How Many Are There?

A foreign private issuer is a non-U.S. company whose securities are registered on a U.S. exchange, provided it meets certain thresholds: either more than 50% of its outstanding voting shares are held by non-U.S. residents, or it meets conditions related to where its business is primarily conducted, its assets are located, or where its majority of directors or officers are based. The test is designed to distinguish genuine foreign companies from U.S.-operated firms that happen to be incorporated abroad.

The scale here matters. NYSE alone lists more than 530 international companies from 48 countries — the largest cohort of international listings on any global exchange. When you add Nasdaq, the total population of foreign-listed companies with U.S.-registered securities runs into the hundreds. In the first quarter of 2025, 58% of all U.S. IPOs were launched by foreign issuers, showing that this population is growing, not shrinking.

The SEC estimated that the HFIAA would create between 3,728 and 21,017 new Section 16 reporting persons in a typical compliance year — individuals who never appeared in the EDGAR insider transaction database before March 2026.

What the HFIAA Changed: Section 16 Now Applies to FPI Officers and Directors

The statutory mechanism is straightforward. The HFIAA amended Section 16(a) of the Securities Exchange Act of 1934 to expressly cover “every person who is a director or officer of a foreign private issuer with equity securities registered under Section 12 of the Exchange Act.” The SEC adopted its final rule amendments on February 27, 2026 — ahead of the statutory deadline — with an effective date of March 18, 2026.

There are two important scope limitations that distinguish the FPI regime from the domestic one:

The Three Forms FPI Insiders Now File

The forms are the same ones domestic insiders have filed for decades. Here is how each one applies to the new FPI filer population:

The Six-Jurisdiction Exemption: Who Is Still Off the Hook

The HFIAA granted the SEC authority to exempt FPI insiders where foreign law imposes “substantially similar” obligations. On March 5, 2026, the SEC exercised that authority by issuing a conditional exemptive order covering six jurisdictions: Canada, Chile, the European Economic Area (all 27 EU member states plus Iceland, Liechtenstein, and Norway), the Republic of Korea, Switzerland, and the United Kingdom.

To rely on the exemption, directors and officers must: (1) report transactions under their home jurisdiction’s disclosure regime, and (2) make those reports publicly available in English within two business days of filing — the same window as a domestic Form 4. The exemption applies only if the company itself is incorporated in one of those six jurisdictions— not simply if the director or officer is a national or resident there.

What the New Filings Look Like on EDGAR

The forms themselves look identical to a domestic Form 4. That’s by design — the HFIAA did not create a separate FPI-specific form. When you pull up a Form 4 for a Chinese technology company’s CFO, you’ll see the same fields as any domestic filing: transaction date, security type, number of shares acquired or disposed, price per share, transaction code, and post-transaction holdings.

To find them, go to EDGAR full-text search at efts.sec.gov, enter the company name or CIK, and filter by form type 4. All Form 4 filings are publicly available within hours of submission and are free to access without an account.

The EDGAR system was updated on the morning of March 18, 2026 to support the new Form 3, 4, and 5 submissions from FPI filers. Some first-time filers encountered delays obtaining EDGAR Next credentials, prompting the SEC to issue relief extending deadlines for late initial filings attributable to those access issues. The filing backlog is expected to clear as the FPI population completes EDGAR onboarding over the coming months.

The Important Caveats: Why FPI Insider Signals Are Different

This is the section to read carefully before treating every new FPI Form 4 like a domestic insider signal. There are three structural differences that matter.

Caveat 1: No Short-Swing Profit Rule

For domestic insiders, Section 16(b) is a powerful constraint: any profit from buying and selling (or selling and buying) the same company’s stock within a rolling six-month window must be disgorged back to the company. It is automatic and enforceable by any shareholder. This rule makes opportunistic round-trips — buying ahead of good news and selling shortly after — unattractive for domestic insiders, because the company can claw back the profit.

FPI insiders are explicitly exempt from Section 16(b). A Chinese tech company CFO who buys stock in January and sells at a profit in March faces no disgorgement liability. The deterrent that disciplines domestic insiders simply does not apply. This does not make FPI insider buying meaningless — buying still signals conviction — but it does mean the signal operates under different structural conditions than the domestic equivalent.

Caveat 2: No 10%-Holder Requirement

For domestic issuers, any person or entity owning more than 10% of a class of equity must also file Section 16 reports. This means large block-holders — activist investors, major institutional shareholders — appear in the domestic EDGAR dataset. The HFIAA does not extend this requirement to FPI securities. Only officers and directors of FPIs are covered, not their major shareholders. The FPI insider ownership picture on EDGAR is therefore less complete than the equivalent picture for a domestic company.

Caveat 3: Exempted Jurisdictions Are Already Disclosed

If you see a Form 4 filed by the CFO of a UK company, remember that this same transaction was very likely already publicly available in London under the UK Market Abuse Regulation. The exemptive order’s condition — that the home-country filing be publicly available in English within two business days — means the EDGAR filing may simply be mirroring information that was already accessible to anyone willing to look. For investors focused specifically on the FPI Form 4 data stream as a source of new information, the non-exempted jurisdictions (China, Israel, Singapore, Cayman Islands structures) are where the genuinely novel disclosures are appearing.

How to Use the New Data Stream as a Signal

The same analytical framework that applies to domestic Form 4 signals is the right starting point for FPI filings, applied with awareness of the caveats above. Here is how to approach the new data practically:

Filter by transaction code P. Code P — an open-market purchase — is the only code that unambiguously signals voluntary conviction. The same logic that makes Code P the most meaningful signal for domestic insiders applies to FPI insiders: they are voluntarily putting personal cash to work at the prevailing market price. Grants, option exercises, and tax-withholding sales carry low signal weight for exactly the same reasons as in the domestic context.

Weight cluster buying more heavily. When two or more FPI insiders at the same company file Code P transactions within a short window, that cluster carries extra weight for the same reason it does domestically: independent decision-makers reaching the same conclusion simultaneously is more informative than a single trade.

Prioritize non-exempted jurisdictions. For China-based FPIs in particular, the Form 4 stream starting March 2026 represents genuinely new information that was simply not available to U.S. investors before. Israeli companies (many of which list on Nasdaq) and Cayman Islands-domiciled structures (common for Southeast Asian tech companies) are similarly high-value targets for the new data.

Observe before drawing strong conclusions.This data stream is brand new. The baseline for “normal” FPI insider activity — how frequently do they trade, what amounts are typical, what does cluster buying look like at a Chinese tech company — has not yet been established. The sensible approach is to monitor the data for several quarters before making strong inference from individual filings. Academic research on the predictive value of FPI insider trades specifically does not yet exist; the signal quality relative to domestic insiders will only become clearer over time.

The Bigger Picture: Why Congress Acted Now

The HFIAA was part of the National Defense Authorization Act — an unusual vehicle for a securities disclosure rule. The legislative context matters. Congressional concern about Chinese issuers in the FPI population was a primary driver: the argument was that the blanket FPI exemption created a two-tier market where insiders of Chinese companies listed on U.S. exchanges operated with no disclosure obligations to the American investors who held their stock.

The SEC’s own analysis framed the HFIAA as the largest expansion of the publicly trackable EDGAR insider transaction universe since Section 16 was originally enacted. With between 3,728 and 21,017 new reporting persons expected in a typical compliance year, this is not a marginal change at the edges of the insider data ecosystem. It is a structural expansion that adds an entirely new population of companies — and a new population of filers who have never appeared in the EDGAR dataset before.

For investors who have spent years tracking domestic insider activity as a signal source, the HFIAA creates an opportunity: a new dataset, covering companies that were previously opaque from a U.S. disclosure perspective, now populating the same EDGAR system with the same two-business-day Form 4 filings. The signal quality will take time to calibrate. The opportunity is real.