SEC Concept Release on Foreign Private Issuer Eligibility

• The SEC is considering changes to the definition of Foreign Private Issuer (FPI).
• These changes are focused on companies that maintain listings only in the United States, many of which are domiciled in offshore jurisdictions.
• The changes, if adopted, could potentially result in a loss of FPI status for some issuers.

On June 4, 2025, the Securities and Exchange Commission released a concept release on Foreign Private Issuer Eligibility aimed at soliciting comments on the definition of “foreign private issuer.”

The current regulatory framework for Foreign Private Issuers (FPIs), which was originally adopted in 1990, was aimed at addressing challenges faced by FPIs in accessing US capital markets. In recent years, however, the SEC has noted that the composition of FPIs has changed and may no longer reflect the issuers that the SEC intended to benefit from the accommodations.

In particular, the SEC has raised concerns that FPIs are increasingly incorporated in jurisdictions with limited or more flexible disclosure requirements, such as some Caribbean jurisdictions. As a result, the SEC has noted that those companies may not be subject to meaningful home country regulation, particularly where they are not listed in the stock market of their home country. In addition, the SEC is concerned that FPI reporting requirements could be circular in cases where an FPI is exempt from reporting regulations in their home country because they report in the US but the FPI is also exempt from certain reporting requirements applicable to domestic issuers in the US because US regulation defers to home country reporting requirements.

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