SEC reviews foreign private issuer definition amid market changes
The US Securities and Exchange Commission (SEC) has issued a concept release examining whether the current definition of “Foreign Private Issuer” (FPI) remains appropriate, in light of significant changes in how foreign companies engage with US markets.
One trend driving the review: over half of all FPIs now have their equity securities traded almost exclusively on US exchanges, with minimal or no trading abroad. This departs from the original framework, which assumed that FPIs would maintain a meaningful presence in foreign markets.
The SEC is considering two possible approaches. One would introduce a foreign trading volume requirement—setting a minimum percentage of equity trading that must occur outside the United States, with thresholds ranging from 1% to 50%. Another would restrict FPI status to companies based in jurisdictions the SEC recognises as having strong regulatory oversight.
These changes could reshape the reporting landscape for companies currently benefiting from FPI accommodations such as extended filing deadlines and exemptions from quarterly reports. Firms operating primarily in US markets may find themselves subject to the full scope of domestic issuer obligations.
The SEC is inviting public comment for 90 days. Read the concept release and share your perspective here.
