Month-In-Brief: Securities Law

Current Month (February 2026)

SEC Adopts Final Rules for the Holding Foreign Insiders Accountable Act

By Rani Doyle

On February 27, 2026, the Securities and Exchange Commission (“SEC”) adopted final rule and form amendments to reflect the requirements of the recently enacted Holding Foreign Insiders Accountable Act (“HFIA”), “which will increase transparency into the holdings and transactions of directors and officers of foreign private issuers” (“FPIs”).

Directors and officers of FPIs with a class of equity securities registered under Section 12 of the Exchange Act “must begin disclosing their holdings and transactions in the FPI’s equity securities on March 18, 2026, the effective date of the HFIA Act.”

As described by the SEC’s press release,

The HFIA Act, enacted on Dec. 18, 2025, amended Section 16(a) of the Exchange Act to require every person who is a director or an officer of an Exchange Act reporting FPI (but not “10 percent holders” who beneficially own more than 10 percent of any class of equity securities of such FPIs) to file Section 16 reports electronically and in English. The HFIA Act mandates that the Commission issue final regulations (or amend or rescind existing regulations in whole or in part) to carry out the amendments made by the HFIA Act no later than 90 days after the date of enactment.

To reflect the changes made by the HFIA Act, the SEC’s final rule amendments revise Section 16 reports, as well as the following:

• Rule 3a12-3(b) “to remove the current exemption from Section 16 in its entirety and replace it with exemptions from the Section 16(b) short-swing profit rules and Section 16(c) short selling prohibition only”
• Rule 16a-2, “which identifies persons and transactions subject to Section 16, to exclude 10 percent holders of FPIs’ equity securities from the requirements of Section 16(a) and related rules”

The fact sheet, adopting release, and SEC chairman’s statement are linked here.

SEC’s Division of Enforcement Updates Enforcement Manual

By Noah B. Levin, WilmerHale

The Enforcement Division of the Securities and Exchange Commission announced updates to its Enforcement Manual and undertook to review the Enforcement Manual on an annual basis going forward. The Enforcement Manual, which was last updated in 2017, was revised to make the following changes:

• Wells Process: The updated Enforcement Manual makes changes that underscore the importance of “open, informed and thoughtful dialogue” with the SEC, including providing that recipients of a Wells notice will ordinarily receive four weeks to make Wells submissions and that Wells meetings will be scheduled within four weeks of receipt of a Wells submission and will include a member of senior leadership within the Division. The updates also provide guidance on what makes Wells submissions most helpful to the SEC staff, including when they focus on disputed factual or legal issues, raise significant legal risks, or raise significant policy or programmatic concerns, among other factors.
• Simultaneous Consideration of Settlement Recommendations and Waiver Requests: The Enforcement Manual update reflects the SEC’s September 2025 restoration of its practice permitting settling parties to request that the SEC simultaneously consider a settlement offer and other collateral consequences resulting from the underlying enforcement action.
• Additional Updates: The Enforcement Manual updates also include a number of other changes related to internal collaboration within the SEC, updates to the formal order process, an updated framework for referrals to criminal authorities, and provisions concerning the framework for evaluating cooperation efforts.

Earlier in February, SEC Enforcement Director Meg Ryan delivered remarks on the SEC’s enforcement program and potential areas of future focus.

Regulators Begin to Assess Regulation of Prediction Markets, Including for Insider Trading Issues

By Rani Doyle

Regulators are looking at prediction markets and how are being or can be used for insider trading and market manipulation. Both the Commodity Futures Trading Commission (“CFTC”) and SEC have oversight interests and are determining relevant oversight authorities.

Recent newsworthy incidents that have raised concerns about insiders using prediction markets to trade based on nonpublic information include the following:

• A suspicious $32,000 bet on Polymarket regarding the removal of Venezuelan leader Nicolás Maduro reportedly netted over $400,000 just hours before a U.S. military operation.
• OpenAI fired an employee in early 2026 for using confidential company information to place winning bets on prediction markets.
• The CFTC issued a prediction markets advisory highlighting a case where a YouTube channel editor used advance knowledge of video content to trade on related contracts, resulting in a fine and disgorgement imposed by the prediction market platform.

SEC Chair Paul Atkins testified before the Senate Committee on Banking, Housing, and Urban Affairs earlier this month and noted that the SEC is scrutinizing prediction markets and that the SEC and CFTC have potentially overlapping jurisdiction.

State regulators and Congress also have legislation in process, including the proposed Public Integrity in Financial Prediction Markets Act of 2026. This bill would bar specified elected officials and political employees from trading on prediction market contracts tied to government actions or policy or political outcomes if they possess or have access to material nonpublic information gained through their official duties.

SEC Chairman and Division of Corporation Finance Director Give Insights on Future “Blockbuster” Rulemaking Initiatives

By Rani Doyle

On February 17 and February 13, the SEC published remarks by, respectively, Chair Paul Atkins and Division of Corporation Finance Director James Moloney giving thoughts behind upcoming rulemaking initiatives. Here is my summary of the “top ten” potential developments from these and other recent statements:

1. Providing an Opt-Out from Quarterly Reporting: The Division has been directed to prioritize a rulemaking that gives companies the option to report on a semi-annual basis rather than quarterly. This is intended to curb “short-termism” and reduce quarterly audit and compliance pressures and costs.
2. Comprehensive Regulation S-K Overhaul: Corp Fin has launched a top-to-bottom review of all non-financial statement disclosures. The staff is explicitly looking for “targeted, concrete recommendations” to eliminate information that is compliance-driven but not material.
3. Simplifying Executive Compensation Disclosures:
   1. “Pay-Versus-Performance” Simplification: Described by Atkins as “disclosure written by economists for economists,” the 2022 rules are slated for a major simplification to reduce the complex valuation and tabular requirements that require specialized consultants to prepare.
   2. Modernizing “Perks”: The SEC is reviewing the treatment of executive security as a “perk.” In a post-2020 environment, leadership views security as a business necessity rather than a personal benefit, potentially removing it from compensation tables.
   3. Elimination of Post-Departure Stock Ownership Reporting: Chair Atkins questioned the value of requiring companies to track and report the stock ownership of a CEO who left the company over a year ago, characterizing it as an “impractical” burden.
   4. Reducing the Number of Named Executive Officers (“NEOs”): Chair Atkins signaled a reduction in the number of NEOs, asking whether compensation details for all of the required executives are material to investors.
   5. No Historical Compensation Disclosures in Spin-Off Filings: Analogizing spin-offs to IPOs, the SEC staff issued a revised Regulation S-K Compliance and Disclosure Interpretation (“C&DI”) 217.01 stating no historical S-K 402 disclosures are required for SpinCos that represent part of a parent’s business or have new management who will be named NEOs after the spin.
4. Modernizing “Related Party” Disclosures:
   1. Raising the threshold for RPT determinations: Commissioner Mark T. Uyeda has proposed raising the static $120,000 threshold for Item 404(a) related-party transactions, noting this might help ensure disclosures are material to the company’s overall financial health.
   2. Narrowing the definition of “immediate family” member: Chair Atkins suggests the SEC consider adopting a “Thanksgiving meal” standard to include only relatives with whom an executive has a meaningful financial or social nexus.
5. Streamlining Cybersecurity Disclosure: Chair Atkins and Commissioner Uyeda have called for a move away from prescriptive narrative descriptions of cyber policies. The goal is to move from “shaming” disclosures to high-level, materiality-based risk summaries that do not provide a roadmap for hackers.
6. Safe Harbors for Risk Factors: To shorten the ever-expanding risk factor section, the SEC is considering safe harbors that would reduce the pressure on companies to catalog every conceivable contingency, allowing them to focus on risks “specific and material to the company.”
7. Scaled Disclosures for Emerging Growth Companies (“EGCs”): The 2026 “Reg Flex Agenda” includes plans to expand EGC accommodations, potentially raising the revenue caps or extending the five-year “grace period” to allow more companies to use scaled disclosure.
8. Elimination of the “5-Year Performance Graph“: Recognizing that real-time evaluative tools are now widely available on mobile devices, the SEC is planning to delete the requirement under Item 201(e) for a five-year cumulative return graph.
9. Shareholder Proposal Reform: A planned April 2026 rule would likely increase the thresholds for resubmitting failed proposals and curb the use of “Notices of Exempt Solicitation” by smaller-stake activists.
10. Broker Search Flexibility: New staff guidance allows companies to conduct broker searches fewer than twenty business days before a record date if they have a reasonable belief that proxy materials can still be disseminated on time—a small but vital change for deal timing.

See Chair Atkins’s “Remarks at the Texas A&M School of Law Corporate Law Symposium” and Division of Corporation Finance Director Moloney’s “Coming Attractions from the Division of Corporation Finance.”

SEC Staff Issues More C&DIs on Exempt Offerings

By Liz Walsh, Mayer Brown

On February 17, the staff of the Division of Corporation Finance of the SEC issued new C&DIs on Regulation A (“Reg A”) and Regulation Crowdfunding (“Reg CF”). Much of the is new, although it is consistent with positions the Staff has taken with respect to such offerings in the past, and, with respect to the Reg A guidance, is consistent with Staff guidance generally applicable to registered offerings. Unless otherwise noted, all C&DIs are included in the Securities Act Rules CDIs.

Our full post highlighting the new guidance is linked here.

SEC Issues FAQs on Names Rule

By Karen Liu, Reid & Wise LLC, and Spencer Shih

On February 18, 2026, the staff of the Division of Investment Management of the SEC released four additional Frequently Asked Questions relating to the Names Rule to clarify the following:

• A fund is not required to provide a sixty-day notice to shareholders of nonmaterial changes to an existing non-fundamental 80 percent investment policy or when a fund amends its policy to make it more stringent and compliant.
• A fund may count as qualifying assets for purposes of its 80 percent investment policy the value of any cash and cash equivalents that cover unfunded commitments to invest equity in underlying asset-holding vehicles, provided that the fund should disclose such intention in its registration statement.
• A fund that includes the term “growth” or “value” in its name may not need to adopt an 80 percent investment policy if such a term is paired with certain other terms that modify its meaning.
• A fund that includes the term “merger” or “merger arbitrage” in its name does not need to adopt an 80 percent investment policy because such terms suggest an investment technique rather than a particular characteristic of investments.

Relatedly, simultaneously on February 18, 2026, the SEC issued a final rule (the “Final Rule”) to extend the compliance dates for the amendments to Form N-PORT adopted in the Names Rule to the following dates:

• November 17, 2027, for fund groups with net assets of $10 billion or more as of the end of their most recent fiscal year; and
• May 18, 2028, for other fund groups.

It is worth noting that, in the Final Rule, the SEC clarifies that the compliance dates for other aspects of the Names Rule remain June 11, 2026, for fund groups with net assets of $1 billion or more as of the end of their most recent fiscal year, and December 11, 2026, for other fund groups.

SEC Proposes Amendments to Form N-Port Reporting

By Karen Liu, Reid & Wise LLC, and Spencer Shih

On February 18, 2026, the U.S. Securities and Exchange Commission (“SEC”) proposed amendments to Form N-PORT (the “Proposed Rule”) to reduce registrants’ reporting burdens without significantly affecting the SEC’s use of the data or the public’s ability to assess relevant information about a fund. The Proposed Rule would:

• provide reporting funds with an additional fifteen days to file monthly Form N-PORT (from thirty to forty-five days);
• restore the publication frequency of Form N-PORT back to quarterly from monthly;
• narrow the scope of certain information collected on portfolio level risk metrics and returns;
• eliminate certain information collected for compliance with the amended rule 35d-1 under the Investment Company Act of 1940 (the “Names Rule”);
• eliminate certain other reporting information;
• require additional identifying information about funds, such as ticker symbols and class names; and
• require separate net assets and flow information for ETF share classes and each class’s ticker.

Comments on the Proposed Rule should be submitted to the SEC online, by email or by mail on or before April 24, 2026.

SEC Appoints New PCAOB Board Members

By Thomas W. White, Retired Partner, WilmerHale

Last year, the Securities and Exchange Commission announced that it was seeking candidates to fill all five positions on the Public Company Accounting Oversight Board, including Chairman. On January 30, the SEC announced that it had appointed a new Chairman and three new members of the Board. One sitting member has been retained.

As reconstituted, the members of the Board are:

• Demetrios Logothetis, Chairman, a retired partner of Ernst and Young who held a number of senior positions at that firm
• George Botic, the continuing member of the Board who served as its acting chair from July of last year until Logothetis took office
• Mark Calabria, formerly a senior staff member at the Office of Management and Budget and the Consumer Financial Protection Bureau
• Kyle Hauptman, chairman of the National Credit Union Administration
• Steven Laughton, formerly counsel to a member of the Board, who previously served at the Treasury Department

Logothetis, Calabria, and Laughton were sworn in on February 10.

Although the PCAOB was designed as an independent, expert body, SEC replacement of all or most of its members following a change in presidential administrations has become the norm.

CFTC Leadership Update

By Noah B. Levin, WilmerHale

David Miller was announced as the incoming Director of Enforcement of the Commodities Futures and Trading Commission (“CFTC”). In a statement on the appointment, CFTC Chairman Michael Selig touted Miller’s experience as a commodities and derivatives litigator. Miller, who will assume the role starting on March 2, has experience in both private practice and as a federal prosecutor and assistant U.S. attorney.

CFTC Withdraws Proposed Rule on Event Contracts and Advisory Staff Letter on Sports Event Contracts

By Noah B. Levin, WilmerHale

The Commodities Futures Trading Commission (“CFTC”) withdrew its proposed rule on event contracts and staff guidance on prediction markets. The “Event Contracts” proposed rule would have amended CFTC Regulation 40.11 to further specify and interpret gaming and similar activities as contrary to the public interest and, therefore, ineligible for listing or clearing by CFTC‑registered entities pursuant to Section 5c(c)(5)(C) of the Commodity Exchange Act. CFTC Chairman Michael Selig noted that the withdrawal “reflect[s] the CFTC’s commitment to lawful innovation in our markets” and signaled that the CFTC will pursue new rulemaking. Also withdrawn was CFTC Staff Letter No. 25-36, which advised regulated entities to account for state regulatory actions and related litigation risk in their contingency planning, disclosures, and risk‑management frameworks.