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When Nick Ephgrave QPM, director of the Serious Fraud Office, addressed a group of corporate leaders at Jones Day's London Office in May 2025 about the UK's Economic Crime and Corporate Transparency Act 2023 ("ECCTA" or "the Act"), he was clear about its overarching goal: culture change. The new corporate offence of "failure to prevent fraud" established by ECCTA was intended, he said, to force a shift in organizational mindsets so that improved fraud prevention measures go from being a "nice to have" to the default.
Quite how much the potential impact on the private equity ("PE") sector was at the forefront of lawmakers' thinking is perhaps open to question. Few references were made to it in the various debates on the new provisions. The net result, however, is the same: ECCTA is poised to reshape the compliance landscape for PE sponsors, general partners, funds and portfolio companies.
With the new strict liability offence coming into force on 1 September 2025, private equity professionals must now grapple with the risk of uncapped fines and reputational damage extending well beyond the direct perpetrators of fraud, to encompass the entire PE structure, including parent funds, portfolio companies and, in some cases, general partners.
This White Paper explores the key provisions of ECCTA and its application to private equity structures. It also sets out the practical steps that PE investors and practitioners can take to mitigate risk and ensure compliance.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
