In its latest effort to identify and punish those involved in tax evasion, the U.K. has proposed legislation making it a criminal offence for companies and partnerships to fail to prevent their agents from facilitating tax evasion. The proposed regulations – known as the “failure to prevent the facilitation of tax evasion” rules (UKFP rules) – are broad in nature and will affect a range of businesses, including private fund managers and other financial services firms. In this guest article, the second in a two-part series, Sidley Austin partner Will Smith provides an in-depth discussion of how the UKFP rules may apply to private fund managers, including U.S.-based investment managers that have a link to the U.K. The first article provided an overview of the UKFP rules and discussed the two new criminal offences prescribed therein. For insight from Smith’s partner, Leonard Ng, see “E.U. Market Abuse Scenarios Hedge Fund Managers Must Consider” (Dec. 17, 2015); and “Sidley Austin, Ivaldi Capital and Advise Technologies Share Lessons for U.K. Hedge Fund Managers From the January 2015 AIFMD Annex IV Filing” (Mar. 27, 2015).