Private Intermittent Securities and Capital Exchange System (“PISCES”): the FCA’s final rules

Background to PISCES

PISCES is designed to bridge the gap between private and public markets by creating a secondary market for private company shares, reflecting UK government initiative to foster growth for UK companies and to support the UK’s IPO pipeline.

The new market will enable large and growing private companies, who are not considering an IPO, to establish a market trade in their shares, establishing shareholder liquidity and an active shareholder base for future fundraises. The new platform will also allow private companies to prepare for public markets.

To facilitate and promote the new market, the UK government has announced that share trades on PISCES will be exempted from stamp duty and stamp duty reserve tax. And for employees with share options, the UK government will legislate, with retrospective effect, to allow these shares to benefit from the tax advantages should the employees choose to exercise them on PISCES.

Due to its significant innovation in the UK, PISCES is being delivered through a financial markets infrastructure sandbox operated by the FCA and is expected to run for five years, until 5 June 2030, with the possibility of extension by the UK government.

We wrote about the details of PISCES, including how it will operate, in March of 2024, when the initial consultation paper was issued by HM Treasury. Since then, the proposal has undergone further consultation and legislative implementation.

Timeline

The final rules

The policy statement includes the FCA’s response to the consultation feedback, making various technical changes to their final rules to align PISCES more closely with the private market practice while maintaining proportionate standards.

These are set out in the following chapters:

• Operator requirements: disclosure arrangements
  • PISCES operators are required to include in their rules a requirement for PISCES companies to disclose a set of core information when using their PISCES platform.
  • Where FCA have omitted or removed information from the core disclosure information, this does not prevent PISCES operators from requiring companies to disclosure such information in their rules, or for companies to disclose it voluntarily as additional information. 

• Operator requirements: organising and running trading events
  • PISCES companies have significant discretion in setting price parameters and deciding who can invest in them, and under the final rules, PISCES operators must require companies to disclose the basis on which the price parameters were determined and provide clear process by which companies may restrict participants’ or members’ access to trading events and only permit non-discriminatory restrictions that are based on objective criteria.
  • PISCES operators will be required to include a PISCES Market Risk Warning on their PISCES platform as part of any disclosure information they disseminate on their platform.

• Operator requirements: market manipulation and oversight
  • No insider dealing regime but PISCES operators will be responsible implementing rules and measures for monitoring, investigating and acting against manipulative trading on their PISCES platform.

• Trading intermediary requirements: promotion and distribution
  • This sets out consumer protections to help eligible retail investors identity investments that suit their circumstances and attitude to risk and will apply to retail clients who are individuals.

• Modified application of Handbook rules and guidance
  • This sets out the FCA’s guidance on how existing rules and guidance in the Handbook apply to persons when they are participating in PISCES and to modify how existing rules will apply to the PISCES sandbox arrangements.

• Fees
  • Applicants applying to operate a PISCES must pay a Category 6 fee – £10,880.
  • However, FCA is consulting in CP25/7 to increase it to £11,150 from 1 July 2025 and there are also plans to consult on annual fees for running a PISCES platform in November 2025, which will come into effect from 2026/27.

What's next?

PISCES provides an innovative, and world-first, solution for private companies looking for shareholder liquidity while choosing to stay private for longer. The regime also serves as a strategic stepping stone for companies who are looking for IPO in the future – but not yet.