The UK’s capital markets are evolving, and with them, new opportunities are emerging for private companies. One of the most promising developments is the launch of PISCES – the Private Intermittent Securities and Capital Exchange System. Designed to bridge the gap between private and public markets, PISCES offers a regulated environment for trading shares in private companies. But what does this mean in practice for owner-managers of private companies?
What is PISCES?
PISCES is a new market infrastructure which will allow private companies to trade their shares intermittently on a regulated platform, without becoming public companies.
The system is being piloted through an FCA sandbox, with the London Stock Exchange likely to be among the first to operate a PISCES trading platform via its new Private Securities Market.
Who might benefit?
For certain types of private businesses, allowing shareholders to trade their shares via a PISCES platform could be a game-changer.
- Growth-stage companies seeking liquidity without a full IPO
Companies that have outgrown early-stage funding but aren’t ready – or willing – for a public listing may find PISCES attractive. It allows them to offer liquidity to early investors, founders, and employees without the cost and complexity of an IPO. - Founder-led or family-owned businesses
For businesses where control is a priority, PISCES offers a way to realise value or facilitate shareholder exits while maintaining a private company structure. Trading can be limited to specific windows, helping to manage who comes onto the cap table. - Companies with a broad shareholder base
Where there are many minority shareholders, perhaps due to historic employee share schemes, PISCES can provide a structured, regulated way for those shareholders to realise value. - Companies considering a future exit
PISCES can serve as a stepping stone to a future IPO or trade sale. It allows companies to test investor appetite, build a track record of trading and prepare internal governance and controls for life as a listed entity.
What are the practical advantages of using PISCES?
The regulatory framework for PISCES is designed to balance flexibility with investor protection. As such, participation offers a number of practical advantages:
- Liquidity without listing: PISCES enables share trading without the ongoing disclosure and governance burdens of a public listing.
- Regulated yet flexible: companies benefit from the credibility of FCA oversight (all PISCES platforms must be FCA authorised) but without the full compliance burden of a public listing.
- Lighter eligibility criteria: platform operators will be able to set their own eligibility criteria, which will be lighter than those required for a full public listing.
- Tailored disclosures: the FCA has opted against mandatory "sweeper" disclosures. PISCES operators will set their own disclosure rules, giving companies greater flexibility and the ability to tailor their communications to suit their investor base and business model.
- Customisable trading windows: subject to operator requirements, companies can set their own windows when their shares can be traded. For example, these could be weekly, monthly or quarterly, and there will also be flexibility regarding the duration of each window.
- Cost-efficient: transfers of shares on a PISCES platform will be exempt from stamp duty and stamp duty reserve tax (SDRT), reducing transaction costs for investors.
- Market signalling: participation in PISCES can signal maturity and governance readiness to potential investors and acquirers.
Innovation and opportunity
PISCES represents a significant innovation in the UK’s capital markets. For owner-managers of private companies, it offers a new way to unlock value, manage shareholder liquidity and prepare for future growth – all within a regulated but flexible framework.
If your company is considering how to provide liquidity or attract new investment without going public, PISCES may be worth exploring. As the regime evolves, early adopters may also help shape the future of private capital markets in the UK.