Author: admin

On December 10, 2025, the U.S. House of Representatives passed the National Defense Authorization Act for Fiscal Year 2026 (the NDAA). The NDAA is a broad policy bill that authorizes spending levels, policies, and authorities for key military and national security activities for the upcoming fiscal year. However, buried within the sweeping legislation is Section 8103, Disclosures by Directors, Officers, and Principal Stockholders, or the Holding Foreign Insiders Accountable Act (the HFIAA). Under the HFIAA, Section 16(a) of the Securities Exchange Act of 1934 (the Exchange Act) will be amended to subject directors and officers of foreign private issuers (FPIs) to the Securities and Exchange Commission (SEC) reporting requirements on Forms 3, 4, and 5. 

The NDAA is now headed to the Senate for approval, which is expected to happen prior to the upcoming holiday break. The amendments under the NDAA will take effect 90 days after it is signed into law.

Key Requirements of Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires directors, officers, and 10% beneficial owners (collectively, insiders) of a public company’s listed equity securities to publicly report their ownership and transactions in such public company’s securities. These insiders are required to report their initial ownership in the public company’s equity securities on SEC Form 3 in connection with an initial public offering by the date the registration statement becomes effective or, for already public companies, within 10 calendar days of becoming a reporting person under Section 16. In addition, these insiders are required to report subsequent transactions in the public company’s equity securities (e.g., purchases and sales, gifts, and compensation-related transactions, including equity compensation grants and other transactions in connection with such equity compensation grants) on SEC Form 4 within two business days of the relevant transaction. They must also report annually certain other transactions that were not reported on either SEC Forms 3 or 4, on SEC Form 5 within 45 days of the public company’s fiscal year end.

Violations of Section 16(a)

Late or missing filings of Section 16 reports constitute a violation of the securities laws by the individual responsible for making the filing and can draw SEC scrutiny to the FPI, particularly in cases where there are multiple or frequent violations. The SEC has recently focused on untimely filings of Section 16 reports, announcing last year several enforcement actions against individuals – and the affiliated public companies that had undertaken to file on their behalf – for failure to timely file Section 16 reports. The SEC ultimately has broad authority to enforce the securities laws and is permitted to seek “any equitable relief that may be appropriate or necessary for the benefit of investors.” 

Impact on FPIs: Additional Transparency for Equity Ownership and Compensation

Historically, insiders of FPIs were exempt from the Section 16(a) reporting requirements, the Section 16(b) short-swing disgorgement rules, and the Section 16(c) short-sale restrictions, each of which apply to insiders of U.S. domestic public companies. While the NDAA does not go so far as to subject FPIs to Section 16(b) (for short-swing profit liability) or 16(c) (for short-sale restrictions), directors and officers of FPIs will soon be required to report changes in their individual beneficial ownership, including any equity compensation awards received. The NDAA does not, however, extend Section 16(a) reporting requirements to 10% beneficial owners of FPIs.  

More broadly, FPIs have historically not been required to report the individual compensation of their directors and officers unless such disclosure was required to be made in their home country, and an individual’s equity ownership in the FPI was not required to be disclosed unless it exceeded 1% of the FPI’s total outstanding class of shares. In many cases, equity compensation represents a significant portion of an officer’s overall compensation from a company, and, via Section 16 reporting, such compensation will now be made publicly available. For many insiders, this will represent the first time they need to publicly disclose their individual shareholdings.

The HFIAA does include a new provision that allows the SEC the authority to exempt any person, security, or transaction from Section 16 reporting obligations if the SEC determines that the laws of a foreign jurisdiction apply “substantially similar requirements” to such person, security, or transaction. However, it is not clear what “substantially similar” means or how likely it will be that the SEC grants such an exemption.

Key Considerations

These changes represent a significant departure for the way FPIs report director and officer compensation and will create new filing obligations for directors and officers of FPIs. Below are a few key points to consider in connection with the implementation of the HFIAA:

• FPIs should revisit who they have designated as “executive officers” in their disclosure and in connection with the adoption of their clawback policies as those same officers will now be subject to the above Section 16 reporting requirements.
• FPIs should start to prepare for the implementation of these reporting requirements by enrolling their directors and officers in EDGAR Next, to the extent they are not already enrolled for purposes of electronically filing Forms 144, to ensure each director and officer is appropriately set up to make filings with the SEC.

Thank you, Chairman Atkins, Commissioner Uyeda, and Richard. And thank you all for joining us in-person or online for the Crypto Task Force’s sixth roundtable. Thank you especially to our moderator, Yaya Fanusie, and today’s panelists for what will be an interesting and perhaps passionate discussion about financial surveillance and privacy.

Happy Bill of Rights Day![i] Last time when I spoke at length about privacy, I told the story of my grandfather and his not-so-private telephone conversation.[ii] My other grandfather lived across the ocean in Friesland, which is in the northern part of the Netherlands. During the Nazi occupation of the country, a German officer came to my grandfather’s house to secure a room for the officer’s girlfriend. My grandfather, an opponent of the occupiers, certainly could not have one of them living in his house. So, my mother, who was a young child, was paraded in front of the officer with a warning that the house was full of similarly runny-nosed children. Wouldn’t his girlfriend prefer to live somewhere else? She would, and the family was spared a spy in their midst. Even in less dire times when the stakes are lower, the idea of having an uninvited stranger in your house, watching everything you do, is unthinkable. In this country, people have an expectation of privacy in their homes; the law sets up barriers to prevent government surveillance of people suspected of no wrongdoing.

Similar expectations and protections of privacy do not exist for our financial lives. The lack of financial privacy is puzzling. After all, a walk through someone’s financial transactions will tell the government as much or more about someone as would a walk through her home. Legal developments, most notably the third-party doctrine, and the decades-long cultivation of an anti-financial-privacy ethos in our national consciousness have made mass surveillance routine when it comes to the financial system. People assume—often correctly—that the government is watching their financial transactions and shrug it off because they “have nothing to hide.”

Our national degradation of financial privacy and the rules that embody it are overdue for a change, and crypto is helping to nudge a reassessment. On the one hand, crypto opens new possibilities for transactions without the financial intermediaries that are central to existing financial surveillance programs. Tokenized securities transactions, for example, can occur without the intermediation of a broker. As our personal transactions become increasingly disintermediated, government will receive less information about those transactions from traditional channels. On the other hand, the public blockchains on which many crypto transactions take place are viewable by everyone, which creates a demand for privacy-protecting tools. Accordingly, as crypto usage increases, the public and relevant government agencies need to rethink when and how financial transactions are surveilled.

Deep thought about financial surveillance and privacy issues as they relate to cryptocurrencies is not new. Some of our panelists and others like Ian Miers and Matthew Greene have been thinking about these issues for many years, but new technological developments are broadening the conversation. Accordingly, the recently passed GENIUS Act, which regulates centralized stablecoins, directs Treasury “to identify innovative or novel methods, techniques, or strategies that regulated financial institutions use, or have the potential to use, to detect illicit activity, such as money laundering, involving digital assets . . . .”[iii] That process is underway.[iv] Also in-process are efforts to develop tools to enable law-abiding citizens to live private lives and protect themselves from bad actors. Zero-knowledge proofs shield private information while proving, for example, that someone is permitted to conduct a given transaction. Mixers enable people to make charitable donations,[v] get paid, lend money to a friend, or engage in other legal transactions without telegraphing them to the world. Decentralized physical infrastructure networks provide essential services without a central actor who can withhold these services from disfavored people. At today’s roundtable, we will hear about these and other new technologies designed to protect the privacy of transactions occurring on blockchains and to streamline compliance. The SEC does not endorse any particular product but understanding how these technologies work will inform policymakers as they seek to address the threats facing this nation without undermining our civil liberties.

Several themes should guide the government’s work. Government should not assume ill-intent when people take steps to guard their privacy. Protecting one’s privacy should be the norm, not an indicator of criminal intent. Government should resist the temptation to force intermediation for the purpose of creating a regulatory beachhead or facilitating financial surveillance. Relatedly, the government should avoid imposing regulatory obligations, including Bank Secrecy Act obligations, on a software developer who does not have custody of users’ assets or the ability to override users’ choices.[vi] Additionally, the government should pursue bad actors who use privacy-protecting tools for nefarious purposes while protecting good actors who develop and publish these tools and the law-abiding citizens’ who use them to protect themselves from bad actors.

I look forward to hearing builders and policy professionals on today’s panels discuss how we can use new technologies to protect this nation and to preserve the liberties that make it so special, including the freedom to live a private life. What better day to have this conversation than today, Bill of Rights Day.