U.S. Securities and Exchange Commission issues concept release seeking comment on revising the foreign private issuer definition

The U.S. Securities and Exchange Commission published a concept release seeking public input on whether to revise the definition of “foreign private issuer” and, in turn, which non-U.S. companies should remain eligible for disclosure and reporting accommodations under U.S. federal securities laws. The SEC highlighted that the current framework largely dates to a 1983 test designed to identify when a foreign issuer is “essentially [a] U.S. issuer” based on U.S. ownership levels, the nationality of management, and the location of business operations. It noted that foreign private issuers benefit from accommodations that are not available to U.S. issuers, including not filing quarterly reports, proxy statements, or Section 16 reports, not being subject to Regulation FD, and furnishing current reports on Form 6-K rather than filing Form 8-K. Citing 2023 data, the SEC indicated that almost 55% of foreign private issuers are traded exclusively or nearly exclusively in the United States, with Cayman Islands the most common jurisdiction of incorporation and China the most common headquarters jurisdiction, and flagged questions about continued eligibility where a company’s primary trading market is the United States and it is not subject to meaningful disclosure requirements or securities law oversight in its incorporation or headquarters jurisdiction. The concept release requests market participants’ comments on foreign private issuer eligibility and the appropriateness of the current definition.