On 4 June 2025, the United States Securities and Exchange Commission (US SEC) issued a concept release inviting public comment on whether to revise the existing definition of a “foreign private issuer” under US securities law. This initiative is part of a broader evaluation of regulatory accommodations granted to non-US companies accessing US capital markets, with a focus on the evolving global issuer landscape since the last substantive update in 2003.
Under current US securities regulations, foreign private issuers (FPIs) benefit from modified periodic reporting obligations, exemption from US proxy rules, and the ability to file financials under International Financial Reporting Standards (IFRS) without reconciliation to US GAAP. The concept release raises the question of whether the regulatory threshold for FPI status continues to serve its intended function, given changes in global corporate governance, cross-border operations, and the composition of foreign-listed companies over the past two decades.
US SEC Chairman Paul S. Atkins contextualised the review, stating: “Attracting foreign companies to U.S. markets and providing U.S. investors with the opportunity to trade in those companies under U.S. laws and regulations remains an objective. That objective must be balanced with other considerations, including providing investors with material information about these foreign companies, and ensuring that domestic companies are not competitively disadvantaged with respect to regulatory requirements.”
In line with standard SEC practice, this concept release does not propose formal rules, but rather seeks to solicit empirical and policy input on whether and how the FPI definition should be recalibrated. The document outlines the underlying framework of the current FPI test—which considers shareholder composition, governance structure, and business location—and requests public views on whether the criteria remain effective, or are susceptible to manipulation or regulatory arbitrage.
The US SEC has encouraged commenters to discuss the costs, benefits, and potential compliance burdens associated with possible rulemaking scenarios. The release also invites market participants to identify operational or legal challenges associated with the current test, particularly in cases where multinational corporations with dual operations straddle both domestic and international footprints.
The public comment window will remain open for 90 days following the concept release’s publication in the Federal Register, providing legal practitioners, foreign issuers, and investor advocacy groups the opportunity to engage in the pre-rulemaking dialogue.
Foreign issuers currently availing themselves of FPI status, or planning to do so in upcoming US offerings, should conduct a strategic review of their shareholder base, governance regime, and operational footprint to determine whether they may be affected by a potential narrowing or refinement of the FPI definition.
