The Financial Conduct Authority has unveiled the final rules for its Private Intermittent Securities and Capital Exchange System (PISCES), a new private stock market platform set to launch later this year.
The move aims to open fresh avenues for investors and private companies alike, facilitating liquidity and growth in the UK’s expanding private company sector.
PISCES is designed to enable trading of shares in private companies within an organised marketplace, responding to increasing demand as more companies opt to remain private for longer periods.
The platform allows secondary trading of private shares with companies retaining control over key parameters such as price floors and ceilings, as well as approving who may purchase shares.
By providing institutional investors, high-net-worth individuals, sophisticated investors and employees of participating companies access to this market, PISCES aims to expand the pool of capital available to growth businesses while offering shareholders new exit routes.
Simon Walls, FCA executive director of markets, said: “This bold design rebalances risk, but it is bold risk-taking that made the UK the leading financial centre it is today.
“The new platforms will give investors greater access and confidence to invest in exciting new companies, while early backers and employees can sell up and invest again.
“PISCES is the latest step in the FCA’s wide-ranging reforms to the UK’s markets to boost growth and competitiveness.”
Emma Reynolds, economic secretary to the Treasury, welcomed the initiative, highlighting the collaboration between industry, regulators and government to accelerate innovative reforms.
She also noted recent government measures such as a Stamp Duty exemption for PISCES transactions and tax advantages for employees trading eligible shares.
Sandbox launch and trading models
The FCA will initially roll out PISCES through a regulatory sandbox, allowing the regulator to test the platform before establishing a permanent regime by 2030.
Trading is expected to begin later this year and will include options such as periodic auctions and time-limited continuous trading sessions.
Industry reactions
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The establishment of the PICSES exchange is part of the government’s drive to put a rocket under Britain’s capital markets and support more scale up companies.
“PISCES aims to help turn minnows into much bigger fish, supporting the London market overall. This new type of trading platform will enable intermittent trading of private company shares using market infrastructure.”
Jason Hollands, managing director at Evelyn Partners, welcomed the innovation: “PISCES will enable companies to choose whether to restrict auctions to a limited group of investors or open up more widely, thus enabling them to evolve their ownership structures in a controlled manner and to determine the pricing range.
“This will provide a helpful bridge for companies who are not yet ready for an IPO, but who may be on a journey to public markets over time.”
Dan Coatsworth, investment analyst at AJ Bell, added: “Pisces could help private companies get used to the idea of slices of their business being owned by different people.
“It might act as a stepping stone towards a public stock listing, getting them used to regular financial reporting, transparency as a business and understanding that a company is run for the best interests of shareholders, not the board of directors.”
Meanwhile, the FCA has appointed Sarah Pritchard as deputy chief executive. The new role has been created to reflect the FCA’s expanding remit.
This includes the integration of the Payment Systems Regulator, regulation of stablecoin and crypto firms, as well as buy now pay later (BNPL) activities.
As deputy chief executive, Pritchard will also support the FCA’s increasingly international focus, given its role supporting UK growth and competitiveness.
