The Securities and Exchange Commission has finalized new regulations requiring top executives and board members at foreign companies listed on U.S. stock exchanges to disclose their stock holdings and transactions. The rules, which take effect March 18, eliminate a previous exemption that allowed foreign company insiders to avoid the same disclosure requirements faced by American company officials.
WASHINGTON – The Securities and Exchange Commission announced Friday that it has finalized new regulations mandating that executives and directors at foreign corporations listed on American stock exchanges reveal their shareholdings and trading activities, following a congressional directive from late last year.
This development represents another step in what appears to be increasingly strict oversight of international companies operating in U.S. markets. In the previous year, the SEC initiated regulatory proceedings that may force numerous foreign corporations to provide enhanced disclosure information to investors, addressing what regulators described as a regulatory gap that particularly favored Chinese companies.
Beginning March 18, senior executives and board directors at foreign private companies that issue certain registered securities must start reporting their ownership stakes and trading activities under the newly implemented regulations, according to an SEC announcement. These requirements stem from the Holding Foreign Insiders Accountable Act.
The legislation, which Congress passed in December, removes a previous exclusion that had allowed insiders at international companies to avoid the same reporting obligations that senior officials at domestic U.S. corporations must follow.
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