The UK Government is reshaping the landscape for private capital markets with the introduction of PISCES, a pioneering new system designed to help private companies trade shares in a more structured and accessible way. Developed to bridge the gap between private ownership and public markets, PISCES forms part of a broader initiative to foster growth, innovation and investment in UK businesses.
What is PISCES?
PISCES (Private Intermittent Securities and Capital Exchange System) is a new type of regulated stock market designed specifically for private company shares. It enables companies to trade existing securities through intermittent auctions, offering a controlled and flexible approach to share trading in the private market.
What is the purpose of PISCES?
Companies are increasingly staying private for longer and pursuing alternative funding options before considering an initial public offering (IPO). PISCES aims to provide an intermediary stage between private and public markets by incorporating elements of both. It facilitates multilateral training of shares whilst providing less onerous requirements than a public company when trading shares. Importantly, PISCES will only support the trading of existing shares – it will not allow the issuance of new shares or other types of securities.
Why now?
The Government intends to drive innovation and economic growth by ensuring “capital markets adapt to the evolving needs of business and changing trends in the markets”.
One of the challenges identified in the Government’s consultation is that private company shareholders (particularly in early stages) often lack a clear and standardised route to realise share gains. At the same time, investors face barriers to accessing opportunities in private companies that are not yet listed. Any trades made through PISCES will be exempt from stamp duty to make it an attractive proposition for investors.
It is thought the new legislation will allow shareholders in private companies to access trade shares more easily. Disclosure requirements will apply only around the time of trading events, easing the regulatory burden on private companies.
Next Steps: The PISCES Sandbox
The PISCES Sandbox, launched under the Financial Services and Markets Act 2023, will test the framework over a five-year period. During this time, the Government will evaluate the model’s effectiveness and determine whether it should become a permanent part of the UK’s financial infrastructure.
The detailed rules governing PISCES will be provided once the legislation comes into effect. Those interested in operating or participating in the sandbox will need to apply to the Financial Conduct Authority for approval.
Read more:
- Government goes further and faster to boost capital markets by delivering PISCES
- PISCES: platforms for trading private company shares
Disclaimer
This information is intended for general informational purposes only and does not constitute legal advice. We recommend seeking professional advice before taking any action on the information provided. If you would like to discuss your specific circumstances, please feel free to contact us on 0800 2800 421.
