S. 1089: Holding Foreign Insiders Accountable Act

This legislation, titled the Holding Foreign Insiders Accountable Act, proposes changes to the Securities Exchange Act of 1934 regarding the disclosure requirements for foreign private issuers, specifically their directors, officers, and principal stockholders. The key elements of the bill are as follows:

1. Disclosure Amendments

The bill aims to amend an existing provision of the Securities Exchange Act of 1934 to specifically include foreign private issuers. This means that any directors, officers, and principal stockholders of foreign companies that are publicly traded in the United States will have to provide disclosures similar to those required for domestic companies.

2. Definition of Foreign Private Issuers

The amendment clarifies that the disclosure requirements will apply to foreign private issuers, as defined by relevant regulations. This inclusion is expected to enhance transparency regarding the activities and interests of foreign company insiders in the U.S. markets.

3. Regulatory Impact

The bill states that if the existing regulations are found to conflict with the new amendment, then those inconsistent provisions will no longer be effective. This aims to ensure that the new disclosure requirements take precedence over previous regulations if there are discrepancies.

4. Implementation Timeline

The Securities and Exchange Commission (SEC) is mandated to issue final regulations or amend existing ones to implement these changes within 90 days of the bill's enactment. This provision is meant to expedite the process of making the new disclosure requirements operational.

5. Purpose of the Bill

The overall purpose of the legislation is to enhance the accountability and transparency of foreign companies that operate in U.S. financial markets. By requiring insiders of these foreign entities to disclose their stock holdings and trades, the intention is to provide investors with more information about the individuals who have significant influence over these companies.

Relevant Companies

• NOK - Nokia Corporation: As a foreign private issuer listed in the U.S., it may need to adapt its disclosures to comply with the new requirements.
• TSM - Taiwan Semiconductor Manufacturing Company: As a major player in the semiconductor sector, it could be affected by the new disclosure mandates.
• BABA - Alibaba Group Holding Limited: This large foreign company would face new obligations regarding insider disclosures under the bill.
• AMZN - Amazon.com, Inc.: Though headquartered in the U.S., if it were to have foreign insider stockholders, it could also be affected.