PISCES - Share Trading for Private Markets

PISCES is a new UK-regulated platform that facilitates trading shares in private companies on an intermittent basis. It enables controlled trading events, broader investor access and tailored disclosure rules for private companies incorporated in the UK and overseas. Our Corporate team examines the scope of the framework which aims to create trading opportunities and support growing companies. We also explore the impact for businesses as it looks to balance innovation with investor protection, market integrity, and long-term competitiveness in the UK private markets.

What you need to know

• The PISCES platform enables intermittent trading of shares in private companies under a regulated sandbox framework.
• The framework aims to provide a flexible solution for private companies to provide its shareholders with opportunities to trade their shares with other eligible investors.
• Companies control trading periods, buyer and seller eligibility, and pricing within proportionate disclosure requirements.
• Investor protection is maintained through risk warnings, eligibility checks and oversight of manipulative practices.
• FCA-approved operators of the platform must monitor the disclosure and compliance, with an FCA assessment of the platform after five years.

The launch of the Private Intermittent Securities and Capital Exchange System platform, or ‘PISCES’, heralds a new avenue of access to private company shares. It does so by enabling intermittent, multilateral trading under a Financial Conduct Authority-regulated framework established by the UK HM Treasury. Although modelled to some extent on the US Nasdaq model, the PISCES platform will not operate as a forum for private companies to raise capital through issuing new shares, but as a secondary market for the trading of shares already in existence. The liquidity events allow shareholders of private companies, including employees, and eligible investors to buy and sell shares without the burden of full public market requirements.

Operating within a regulatory sandbox, private firms approved by the FCA will host these liquidity events via a PISCES trading platform. The London Stock Exchange Group is the first FCA-authorised operator to run PISCES trading platform. Operators must ensure that companies meet the disclosure requirements, covering topics like:

• Business overviews
• Key risks
• Financial data and
• Major shareholders

Prior to a trading event, companies that wish to participate on a PISCES platform will have to make available certain financial and other information. These core disclosure obligations have been streamlined for private markets and cover:

• Valuations
• Risk factors
• Shareholder information

Companies participating on a PISCES platform may choose to make additional disclosures via the disclosure portal. The disclosure portal also includes a Q&A feature allowing interested investors to ask a company questions directly before deciding to invest. There is no obligation on a company to update any core or other information during a trading event or, post-trade disclosure requirements for companies. This approach avoids the duplication of information.

The regulatory sandbox will allow the FCA to assess its suitability before deciding whether to make it a permanent fixture in 2030.

Who can use a PISCES platform

Individuals and entities permitted to trade on a PISCES platform include:

• Sophisticated and institutional investors and, high-net-worth individuals.
• Individuals who are the registered holder of, is entitled to purchase or subscribe for, or is otherwise entitled to become a registered holder of a PISCES share.
• Employees, directors and officers of participating company or a company within its immediate corporate group. Also persons who provide consultancy or managerial services to PISCES Companies or a company within its immediate corporate group, subject to company restrictions and Treasury regulations.
• Trustees of employee share schemes and share incentive plans can also use PISCES for employee share ownership.

Companies trading on PISCES platforms have the option of imposing extra restrictions on who can buy its shares. They can also restrict employees from selling shares where they are already subject to contractual restrictions from doing so.

What are the benefits for participating companies?

Companies can choose an operator platform that offers trading events that suit its needs. Companies participating on a PISCES platform can allow the trading of shares in controlled, time-limited windows known as intermittent trading events. These events are not continuous like public markets. Instead, they occur at times set by the company - for example, ad hoc, quarterly, biannually, annually. The company can also determine the duration of the trading window, offering greater control over trading activity.

Companies participating on a PISCES platform may also maintain control over trading conditions. This control can be achieved by choosing who can buy and sell shares, setting price parameters (floor and ceiling prices), who may receive information about the company and determining valuation methods.

The UK government will also introduce an exemption for stamp duty and stamp duty reserve tax for share transfers on a PISCES platform. The introduction of legislation is also anticipated that will allow companies to amend, with employee consent, certain share ownership scheme contracts to include PISCES trading events as an exercisable event without losing scheme tax benefits.

Comment

For Irish energy companies, particularly those scaling up or operating across the UK and Irish markets, PISCES could offer a new route to provide liquidity for existing shareholders, including founders, employees and early investors, without the burden of a full public listing. The platform may prove especially attractive to energy innovators who require ongoing private investment but want to give their stakeholders a transparent, regulated way to trade shares. The platform may also provide an opportunity for Irish energy investors to diversify their portfolios by investing in a range of energy projects across the UK and further afield.

As the sector continues to attract international investment in renewable projects and clean-tech solutions, Irish businesses with UK subsidiaries or investor bases may benefit from the flexibility and visibility that PISCES provides. While the framework is UK-focused, its cross-border potential makes it highly relevant for Irish companies weighing their long-term funding strategies and preparing for possible future public market entry.

For energy clients balancing capital requirements, investor relations and regulatory obligations, PISCES represents a development worth monitoring closely

For more information and expert advice, contact a member of our Corporate team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.