A new type of private stock market will be launched later this year as the FCA announces the final rules for its Private Intermittent Securities and Capital Exchange System (PISCES).
PISCES is a new type of platform where shares in private companies can be traded. The FCA says it will open the door to more opportunities for investors, facilitating their access to growth companies. Private companies can tap into a broader range of investors and asset managers and PISCES offers exits for shareholders to sell up.
The Treasury laid a Statutory Instrument before Parliament in May 2025 which finalised the legislative framework for PISCES.
In a statement, the FCA said: "As companies choose to stay private for longer, there is demand for investors to trade private company shares easily and efficiently in an organised marketplace. PISCES meets this demand by allowing secondary trading of these shares. Companies can set the floor and ceiling of share prices and have a say over who can buy their shares."
Access to PISCES will be limited to institutional investors, high-net-worth individuals, sophisticated investors and employees of participating companies. Investors will be provided with information about the risks involved to help them make informed decisions.
The platform will be delivered through a sandbox, which will allow the FCA to test the design before finalising a permanent regime in 2030. The sandbox is now open, with shares likely to be traded later this year. Trading systems could include periodic auctions, as well as occasional and time-limited periods of continuous trading.
PISCES will be developed using a financial markets infrastructure (FMI) sandbox. This will be the second use of the FMI sandbox powers after the digital securities sandbox.
Simon Walls, executive director of markets at the FCA, commented: “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, said: “PISCES is a great example of industry, regulators and the government working together to go further and faster on innovative reforms to strengthen UK capital markets, supporting economic growth and putting more money in people’s pocket as part of our Plan for Change.
“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.”
Jason Hollands, managing director of Evelyn Partners, added: “This is a welcome development and a genuinely innovative one for the UK’s capital markets. It creates a hybrid market that will provide private companies with access to periodic liquidity windows, without taking the leap to a full listing of their shares on AIM or the main market which would entail the daily trading of their shares and demanding disclosure requirements.
“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.
“At the margin, this may well have a knock-on impact for AIM – the London Stock Exchange’s market for small and medium sized growth companies – which turns 30 next week on 19 June 1995. Some private businesses who might have previously contemplated joining AIM as the next step, may conclude this is a much better option for the next stage in their evolution.
“It is no secret that AIM has been struggling in recent years, with a dearth of new admissions, private equity buyouts, and other companies moving to overseas exchanges or the main market. In fact, AIM has been shrinking at rapid pace with the number of companies on it now at about a third of what it stood at during its peak in 2007. AIM’s challenges are in many ways an amplification of the wider issues that have faced unloved UK equities in recent years.
“The Chancellor’s decision in her Budget last October to halve the amount of inheritance tax relief of AIM companies will provide a further headwind for the market as investors seeking to mitigate IHT by investing in AIM companies has previously proven a meaningful group of owners for a market of relative illiquid companies. Some fund managers expect to see a sizeable exodus of companies from AIM over the next couple of years as a result.
“I do think policy makers need to strike the right balance in measures to bolster investment across the full spectrum of UK equities. The development of PISCES and the recent Mansion House Accord are aimed at supporting investment in private markets, but we also need to reinvigorate UK public markets too where lack of demand and consequently low valuations are an issue. It would be disappointing to plough so much effort into supporting fast-growing UK private companies, only to then see them continue to be lured overseas to markets like NASDAQ and the NYSE as they reach a size and stage when they are finally ready to IPO.”
