ECCTA: what's the latest?
Last spring, we reported on the new Economic Crime and Corporate Transparency Act 2023 (ECCTA). Since then, Companies House has provided further information on the proposed timeframes for the implementation of the new identity verification regime. This confirmed that identity verification for directors, persons with significant control and anyone who files documents on behalf of a company will be rolled out from Spring 2025.
We are still awaiting the Government guidance on the new failure to prevent fraud offence under ECCTA and clarity on when the offence will come into force.
The Wates Principles
The Wates Principles were developed in 2018 in response to government regulation requiring large private companies to adopt a corporate governance code and report against it in their annual Directors' Report.
The latest Review of reporting against The Wates Principles (Review), published in August this year, is a useful reference for companies preparing their corporate governance reports, as it identifies how reporting against each Principle could be improved and provides examples of best practice. The Review notes the "need for companies to reduce their use of boilerplate disclosures" and reminds companies that they should link their disclosures to how the company actual operates and its own purpose, values, strategy and culture.
Walker Guidelines review
The Private Equity Reporting Group (PERG) and the British Private Equity & Venture Capital Association (BVCA), recently launched a consultation to refresh the Walker Guidelines (Guidelines) on Disclosure and Transparency in Private Equity. The review's aim is to calibrate the Guidelines to today's reporting world and to ensure that the Guidelines remain fit for purpose and provide value: to the industry's stakeholders who rely on the transparency and related disclosures, as well as to the private equity firms and companies applying the Guidelines.
The consultation closed at the end of September 2024, and we can expect to see PERG and the BVCA's responses later this Autumn. The final amended Guidelines will be published in January 2025, alongside the 17th Annual PERG Report.
Audit reforms
The King's Speech in July 2024 confirmed that the Audit Reform and Corporate Governance Bill will be laid before Parliament. The Bill will:
- replace the Financial Reporting Council with a new regulator - the Audit, Reporting and Governance Authority (known as ARGA);
- extend Public Interest Entity status (which creates additional reporting and governance obligations) to the largest private companies; and
- take forward some of the previously proposed audit reforms that were shelved by the previous Government.
There has been very little information given on the proposed Bill, at this stage, but we will provide further updates, once we know more.
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