Recent changes to U.S. securities law will significantly expand insider reporting obligations for directors and officers of Canadian companies that qualify as foreign private issuers (FPIs) with securities registered in the United States. These obligations will apply beginning March 18, 2026, ending a long‑standing exemption relied on by many Canadian issuers. With the deadline approaching, Canadian FPIs should begin preparations now to ensure full compliance.

This alert outlines the key U.S. legal changes and provides practical considerations for Canadian FPIs, directors and officers, and in‑house compliance teams navigating this new landscape. 

What Changed Under U.S. Law

On December 18, 2025, the Holding Foreign Insiders Accountable Act, enacted as part of the U.S. National Defense Authorization Act for Fiscal Year 2026, repealed the exemption that previously excluded FPIs from insider reporting under Section 16(a) of the Securities Exchange Act of 1934.

As a result, beginning March 18, 2026:

• Directors and officers of FPIs with equity securities registered under Section 12(b) or 12(g) must publicly report beneficial ownership of equity securities and certain transactions.
• Reporting will occur via Forms 3, 4, and 5, filed with the U.S. Securities and Exchange Commission.

Although the SEC may issue supplemental guidance, Canadian FPIs should assume the March 2026 effective date will hold and finalize preparations accordingly.

Practical Implications

Canadian FPIs should treat March 18, 2026, as a firm deadline. Early preparation is essential, beginning with securing EDGAR credentials for all insiders and drafting the required filings in advance. Late or incomplete filings carry real enforcement and penalty exposure, including the risk of significant civil fines.

Who Is Affected

The expanded reporting obligations apply to:

• Canadian issuers that qualify as FPIs and have U.S.‑registered equity securities.
• Directors and officers based in Canada or abroad who meet the U.S. definition of “officer.”
• In‑house legal, finance, and compliance teams are responsible for disclosure and regulatory coordination.

Currently, these requirements apply only to directors and officers, not 10 per cent shareholders, though issuers should continue monitoring for future SEC clarification.

Determining who qualifies as an “officer” may require careful analysis. While core C‑suite positions clearly fall within the definition, senior operational, technical, and divisional leaders may also be captured based on actual policy‑making authority, not titles.

What Has Not Changed

While reporting obligations are expanding, certain key exemptions remain:

• No short‑swing profit liability under Section 16(b).
• No short‑sale restrictions under Section 16(c).

This means that although disclosure requirements will increase, substantive trading restrictions will not change. For most Canadian FPIs, the primary impact is the need for timely and accurate reporting, not fundamental revisions to insider trading policies.

Timing and Effective Date

The statutory repeal is effective March 18, 2026.

Canadian FPIs should:

• Assume no transitional relief.
• Complete EDGAR onboarding and credentialing well before the deadline.
• Prepare internal systems and procedures to support two‑day reporting for Form 4 filings.

Practical Considerations for Canadian FPIs

Canadian FPIs should begin implementing a readiness plan that includes:

• Identifying impacted insiders: Confirm all directors and officers who will be subject to Section 16 reporting.
• Reviewing governance and disclosure processes: Many Canadian issuers do not yet maintain the infrastructure required for U.S.‑style insider reporting or pre‑clearance.
• Ensuring EDGAR readiness: Directors and officers may require support in obtaining EDGAR credentials and understanding U.S. filing mechanics and timelines.
• Updating internal policies and training: Enhance equity tracking, blackout procedures, and trade‑monitoring systems to align with U.S. reporting deadlines.
• Coordinating cross-border compliance: Canadian requirements will continue to apply in parallel, necessitating alignment between Canadian and U.S. reporting regimes.

A common challenge for Canadian FPIs is simply the lack of EDGAR‑ready infrastructure. Many insiders require hands‑on assistance with account setup, authentication, and navigating the U.S. electronic filing process, areas that differ substantially from the Canadian SEDI system.

Looking Ahead

The SEC may issue further interpretive guidance or consider exemptions tailored to FPIs. Areas where additional clarity would be most valuable include:

• How the U.S. “officer” definition applies within non‑U.S. governance structures; and
• How Section 16 deadlines interact with Canadian SEDI‑based reporting timelines.

Better harmonization in these areas would meaningfully reduce friction for dual‑listed Canadian issuers.

Key Takeaway for Canadian Issuers

The repeal of the long‑standing Section 16 exemption represents a significant shift in U.S. reporting expectations for Canadian FPIs. Proactive preparation is essential to manage insider‑reporting risk, support directors and officers, and ensure a smooth transition before the March 2026 compliance date.

Cozen O’Connor LLP’s Capital Markets & Securities team advises Canadian issuers on U.S. securities compliance, insider-reporting obligations, and EDGAR readiness. These developments highlight the need for organizations to assess whether their existing compliance processes remain aligned with evolving U.S. requirements.

For additional detail on the U.S. statutory changes driving these obligations, see Cozen O’Connor’s U.S. client alert on insider reporting obligations for foreign private issuers under the National Defense Authorization Act for Fiscal Year 2026.