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Explore the FCA’s latest rules on the Private Intermittent Securities and Capital Exchange System (PISCES) and their impact on the UK private stock market expansion.

Introduction

The landscape of the UK private stock market is set to undergo significant transformation with the introduction of the Financial Conduct Authority’s (FCA) new regulations for the Private Intermittent Securities and Capital Exchange System (PISCES). Scheduled to launch in late 2025, PISCES aims to create a structured and efficient platform for trading shares of private companies, thereby unlocking new avenues for investors and fostering market growth.

What is PISCES?

PISCES represents a novel platform where shares in private companies can be traded, addressing the growing demand for secondary trading in private equities. As companies choose to remain private for longer periods, the need for an organized marketplace becomes paramount. PISCES facilitates this by allowing:

• Secondary Trading: Investors can buy and sell shares of private companies seamlessly.
• Price Control: Companies can set minimum (floor) and maximum (ceiling) prices for their shares, ensuring stability and fairness in transactions.
• Selective Ownership: Firms can have a say in who purchases their shares, maintaining control over their investor base.

Regulatory Compliance and Framework

FCA’s Regulatory Approach

The FCA’s introduction of PISCES is part of a broader strategy to enhance the UK’s financial markets, making them more competitive and growth-oriented. The regulatory framework for PISCES was solidified through a Statutory Instrument laid before Parliament in May 2025, ensuring that the platform adheres to stringent legal standards.

Sandbox Implementation

PISCES will be initially delivered through a financial markets infrastructure (FMI) sandbox. This sandbox environment allows the FCA and government regulators to test the platform’s design and functionality before committing to a permanent regime expected by 2030. Key features of the sandbox include:

• Intermittent Trading Events: Platforms will conduct periodic auctions and time-limited continuous trading periods.
• Pre-Application Support: The FCA provides resources for firms interested in operating a PISCES platform, ensuring they meet all regulatory requirements.

Impact on the UK Private Stock Market

For Investors

PISCES broadens access to investment opportunities in growth-oriented private companies. It caters exclusively to institutional investors, high-net-worth individuals, sophisticated investors, and employees of participating firms. By providing detailed risk information, PISCES empowers investors to make informed decisions, enhancing confidence in the UK private stock market.

For Private Companies

Private companies benefit from an expanded pool of potential investors and asset managers. The ability to offer exits for shareholders adds liquidity, making equity stakes more attractive. This increased liquidity can fuel further growth and innovation within the private sector.

Economic Growth and Competitiveness

As Emma Reynolds, Economic Secretary to the Treasury, highlighted, PISCES exemplifies the collaboration between industry, regulators, and the government to drive economic growth. By strengthening the UK’s capital markets, PISCES is poised to support the broader Plan for Change, fostering a more robust and dynamic financial ecosystem.

“PISCES is the latest step in the FCA’s wide-ranging reforms to the UK’s markets to boost growth and competitiveness.”
— Simon Walls, Executive Director of Markets at the FCA

Future Outlook

The launch of PISCES marks a pivotal moment for the UK private stock market. With the sandbox testing phase underway, the platform is expected to enhance liquidity and investment opportunities significantly. As regulatory frameworks evolve, PISCES will likely set a benchmark for private stock trading platforms globally, reinforcing the UK’s position as a leading financial center.

Conclusion

The FCA’s new regulations for PISCES herald a new era for the UK private stock market, offering enhanced trading capabilities and fostering a more inclusive investment environment. By addressing the complexities of secondary trading and regulatory compliance, PISCES is poised to drive significant growth and innovation within the private sector.

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