Current state of play for foreign private issuers

By Sanjay Shirodkar, Andrew Ledbetter, Gina Lee & Jenna Fontenot on June 20, 2025

Posted in Foreign private issuers, SEC reporting, SEC rulemaking

As discussed in our prior blog post, the US Securities and Exchange Commission (Commission) recently issued a concept release (Release) aiming to gather input on whether the criteria for designation as a foreign private issuer (FPI) should be reevaluated in light of changes to the FPI population in recent years. Foreign issuers that qualify as FPIs benefit from a number of accommodations under the federal securities laws as well as the rules and regulations of US securities exchanges.

The Release is focused on reevaluating the criteria for when an issuer would qualify as an FPI. In this alert, we focus on the accommodations that are currently available to FPIs. Based on the market reaction to the Release and the amendments to the existing rules that the Commission ends up adopting, many FPIs will no longer be able to take advantage of the current accommodations.

Periodic reporting obligations

While domestic issuers must file annual reports on Form 10-K within 60, 75, or 90 days after their fiscal year-end depending on their filing status, FPIs have until four months after their fiscal year-end to file their annual reports on Form 20-F.^[1]Certain disclosure requirements of Form 20-F are also less prescriptive than those of Form 10-K, particularly with respect to executive compensation disclosures. In addition, while domestic issuers must file quarterly reports on Form 10-Q, FPIs are not subject to any quarterly reporting requirements other than the required six-month financial update pursuant to both Nasdaq and New York Stock Exchange (NYSE) continued listing rules. This also means that FPIs are not required to undertake management’s quarterly certifications mandated for domestic issuers under the Sarbanes-Oxley Act of 2002.

FPIs are also permitted to “furnish” current reports on Form 6-K to the Commission, rather than “file” current reports on Form 8-K, which is required for domestic issuers for most Forms 8-K. FPIs tend to be less exposed to liability under Section 18 of the Securities Exchange Act of 1934 (Exchange Act), as amended, even though many FPIs with effective shelf registration statements chose to “file” portions of certain 6-K filings to update such registration statements for material developments. Form 6-K has less stringent reporting criteria, allowing an FPI to report only information that is:

Required to be disclosed by the laws of its home jurisdiction

Filed or required to be filed and made public by a stock exchange on which its securities are traded, or
Distributed or required to be distributed to its security holders.

Dual-listed FPIs have relaxed ability to terminate their US public reporting obligations compared to domestic issuers. FPIs may also terminate their registration obligations if the trading volume of their securities in the US falls below a specific threshold, whereas domestic issuers may do so only when their number of shareholders of record falls below certain thresholds.

Financial statements and non-GAAP measures

FPIs may present their financial statements using a variety of accounting standards, including IFRS, US Generally Accepted Accounting Principles (GAAP), or home country GAAP. Conversely, domestic issuers must present their financial statements according to US GAAP. In connection with a registration statement, unlike domestic issuers, FPIs are required to update financial statements only for offerings more than nine months after the fiscal year-end, by providing unaudited interim financial statements covering at least the first six months of the year and the comparable period for the prior year.

Corporate governance requirements

Unlike domestic issuers, FPIs are exempt from the proxy rules under US securities laws and may instead follow their home country’s voting procedures and disclosure practices. Relatedly, FPIs are not required to hold say-on-pay votes.

In addition to the accommodations granted to FPIs by the Commission, US securities exchanges provide FPIs with exemptions from many of their corporate governance listing requirements, allowing FPIs instead to follow their home country’s practices. As a result, FPIs listed on the NYSE and Nasdaq are not required to have a majority of independent directors, an independent compensation committee, and an independent nominating and corporate governance committee or function to obtain shareholder approval of certain matters, or to maintain certain governance documents.

Registration requirements

If certain conditions are met, FPIs are uniquely exempt from the registration requirements of Section 12(g) of the Exchange Act if either, pursuant to Rule 12g3- 2(a), the issuer has fewer than 300 recordholders resident in the US as of its most recent fiscal year-end, or if the issuer satisfies certain foreign listing and electronic publishing conditions. The Commission also permits FPIs to rely on certain exclusions from registration requirements under the Securities Act of 1933, as amended, for certain offerings that occur outside the US pursuant to Regulation S, if the offering at issue is considered an “offshore transaction” and no directed selling efforts take place in the US in connection with the offering.

Other accommodations

FPIs are also exempt from several other important aspects of the US securities laws, including reporting obligations under Section 16 of the Exchange Act and Regulation Fair Disclosure, which prohibits the selective release of material information to securities market professionals and certain shareholders. If certain conditions are met, FPIs are similarly exempt from Regulation Blackout Trading Restriction, which prohibits an issuer’s directors and executive officers from transacting in the issuer’s securities during a pension plan blackout period. Additionally, only a limited subset of FPIs is required by the Commission to formally consent to service of process and appoint a registered agent in the US.

Conclusion

The Commission has solicited comments on “whether alternative approaches, or a combination of approaches, would better address any potential concerns associated with the current FPI definition.” We recognize that the Release represents a preliminary step in rulemaking and that the Commission has invited comments to its specific concept proposals. Depending on the form of any final rule amendments adopted by the Commission, certain issuers may no longer qualify for the currently available FPI accommodations, which would subject them to the more demanding regime for domestic issuers. This is particularly true for FPIs who (a) are either incorporated or have their headquarters in jurisdictions with less robust regulatory and oversight frameworks or (b) trade exclusively on US exchanges without any meaningful home-country regulation. Companies that may be negatively impacted by any final rules adopted by the Commission should consider engaging with outside counsel to comment on the Release and provide meaningful input to the Commission.

For more information, please contact the authors.

^[1]Canadian FPIs that qualify for the multijurisdictional disclosure system (MJDS) can file on Form 40-F, which is more streamlined than Form 20-F and generally defers to Canadian disclosure. Given its application only to certain Canadian FPIs, however, this post focuses on the general FPI rules and not MJDS.