The Private Intermittent Securities and Capital Exchange System (PISCES) is scheduled to launch later this year. In a statement, the UK Financial Conduct Authority (FCA) announced that the new marketplace would be introduced through a sandbox to test its design. The sandbox is now open, with shares likely to be traded later in 2025.
A consultation on PISCES was initiated earlier this year.
The private securities market may include periodic auctions, as well as occasional and time-limited periods of continuous trading. Firms interested in operating a PISCES platform will have to apply to the FCA. The UK government seeks to establish a central repository for trading private securities.
PISCES has been created in an attempt to boost UK capital markets. Similar to the US, private securities have boomed while public markets have been in decline. This decline in public listings may be due in part to onerous rules and excessive compliance costs.
The FCA states that firms are choosing to remain private for longer, while investor interest in private offerings has increased. PISCES will provide an exit opportunity for early shareholders while supplying demand for the asset class. While retail investors are not allowed to participate in PISCES, certain self-certified sophisticated individuals may gain access.
Simon Walls, Executive Director of markets at the FCA, described PISCES as a “bold design” and something the UK needs to remain a top global financial center.
‘”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.”
Emma Reynolds, Economic Secretary to the Treasury, called PISCES a great example of a private-public partnership to pursue reforms that support UK capital markets.
“I welcome the FCA’s announcement, which follows our legislation and opens PISCES to industry. This also builds on our announcements on a stamp taxes on shares exemption for PISCES transactions, and on employees retaining the tax advantages on eligible shares traded.”
Reynolds said PISCES was just the latest step in reforms designed to improve growth and competitiveness.
Douglas Grant, Group CEO of Manx Financial Group, said PISCES was an encouraging development if it can help founders unlock equiity and improve access to private capital. At the same time, he questioned whether PISCES will improve IPO activity as an alternative to regulated exchanges.
“PISCES could risk undermining platforms like AIM, introducing fresh tensions into the UK’s listing ecosystem,” said Grant. “For UK startups and scaleups, these reforms represent a real opportunity to secure the kind of patient capital the domestic market has too often lacked. But goodwill alone won’t deliver results. Regulatory clarity, fit-for-purpose investment structures, a pipeline of investable UK companies, and aligned tax incentives will all be essential to ensure uptake and drive lasting economic impact.”
In the US, private securities markets have existed for years. These are mostly available only to Accredited Investors, but pending legislation may expand access to these private securities markets to a broader range of investors.
The UK government has publicly touted its intention to improve capital markets. Yet, examples like Wise’s decision to dual-list its shares on the NYSE, alongside its listing on the LSE, highlight the challenge of competing with the highly liquid US marketplace.