Foreign Private Issuers In 2026: Times Are Changing

For decades, U.S. securities regulation treated foreign private issuers (“FPIs”) with ‘home country deference,’ offering accommodations based on the premise that robust local oversight rendered many U.S. requirements duplicative. Over time, however, that premise has begun giving way to ‘domestication’: a move to align FPIs with U.S. reporting norms, at least in part based on the idea that these issuers primarily access capital in the U.S. markets.

Stretching as far back as 1935, when the U.S. Securities and Exchange Commission (the “Commission” or the “SEC”) stated that “an endeavor has been made to adapt the requirements for domestic issuers to the peculiar circumstances of foreign issuers. In view of the disparity between the laws and practices existing in the several countries, it was necessary to introduce great flexibility in the requirements;” the federal securities laws have considered that the different characteristics of domestic and foreign issuers requires a different regulatory approach. This difference in approach is evident in our current regulatory scheme, which provides a number of corporate governance, disclosure-related, and procedural accommodations to foreign private issuers. However, in recent years, the question as to whether these accommodations remain appropriate for all foreign issuers has been the subject of debate, and the current framework seems poised for change.

For example, in June 2024, Commissioner Mark Uyeda shared his views on the accommodations provided to FPIs, requesting that “to provide greater certainty to [foreign] companies and ultimately to protect U.S. investors, the agency should articulate a philosophy for when disclosure by foreign companies should be equivalent to disclosure by U.S. companies.” Commissioner Uyeda continued, “As part of this process, the SEC should ensure that its ‘foreign private issuer’ definition reflects today’s capital markets and corporate structures, and captures the appropriate foreign companies,” an idea that may be on its way to fruition with the Commission’s June 2025 Concept Release on Foreign Private Issuer Eligibility, which proposed potential changes to the FPI definition.

This paper examines whether remarks and actions like the above mark a fundamental shift in the Commission’s stated priorities and positions, leading to a permanent shift in the SEC’s approach to the regulation of foreign issuers. We believe that the recent trend will continue and that more change is forthcoming for all FPIs, with the potential for additional focus on issuers based in the People’s Republic of China. We explore the rationale behind this hypothesis, and what it might mean for foreign issuers.

Continue reading this paper on The Review of Securities & Commodities Regulation.

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