PISCES: A Sea-Change for Scale Ups

The UK is launching a new regulatory framework known as PISCES (Public Intermittent Securities and Capital Exchange System) to enable the secondary trading of shares in private companies. Designed to facilitate a regulated trading environment, PISCES will allow intermittent trading of existing shares, offering a route to liquidity without the need for an IPO or acquisition. This initiative aligns with, and forms part of, the UK’s recently-published industrial strategy which sets out its aims to strengthen capital markets and support high-growth businesses, particularly in the science and technology sectors.

A New Kind of Market

PISCES is intended to bridge the gap between private and public capital markets. It is modelled on platforms such as Nasdaq Private Market in the US, which enable the trading of private company shares through structured, periodic trading windows. Trading will take place during these windows (which could be quarterly, biannually or annually) as determined by the company and the platform operator. The goal is to offer greater flexibility and liquidity for companies and shareholders while avoiding the full regulatory burden of a public listing.

Why PISCES Matters

The introduction of PISCES is part of the UK government’s Industrial Strategy and reflects a policy focus on reforming capital markets to improve access to finance for innovative companies. PISCES provides a means for existing shareholders – including early-stage investors, founders and employees – to realise the value of their holdings without waiting for a traditional exit event. It also supports employee retention and incentivisation by allowing share options to be converted into tangible returns. Companies benefit from the opportunity to manage or diversify their shareholder base, while a wider pool of institutional and sophisticated investors gain access to growth-stage companies that are otherwise difficult to invest in. In addition, the structure encourages companies to adopt stronger governance and transparency practices, helping them to prepare for a future public listing if desired.

How It Will Work

Each PISCES platform will be operated by an FCA-authorised firm, with the London Stock Exchange and Globacap among those expected to be early entrants. Most platforms are likely to use an intermediated model, where brokers act on behalf of clients and conduct eligibility and compliance checks. These will include standard KYC processes as well as platform-specific investor requirements. 

Companies will also be required to disclose “inside information” – that is, information that has not been made public, relates directly or indirectly to the company or company shares, and if made public would have a significant impact on the price of those shares. Unlike public markets, companies will be able to disclose such information within a “private perimeter,” limiting the disclosure of sensitive information to approved participants. For example, inside information such as insider activity, share ownership, price parameters, and trading restrictions must be disclosed to eligible investors, though not necessarily to the wider market. 

The intention, however, is that PISCES will operate on a "private plus" basis – with practices and risk attitudes befitting a private transaction, even with the information disclosure requirements. As such, regulations such as the Takeover Code will not apply.

Who Can Participate?

All UK companies and eligible overseas companies whose shares are not currently admitted to public trading may apply to join a PISCES platform. While there is no strict limitation on company type, PISCES is likely to appeal most to fast-growing private companies, particularly those with a large or complex shareholder base, such as those with employee-shareholder arrangements. Platform operators will have discretion to set entry criteria, including governance standards and information requirements, allowing them to tailor their market to the needs of participants.

Who Can Invest?

Initially, only institutional investors, employees of participating companies, and investors who qualify as high net-worth individuals or self-certified sophisticated investors under the Financial Promotion Order will be permitted to buy shares. There appear to be no restrictions on who may sell shares, although participating companies will need to decide internally which employees can sell, and to what extent. Companies will also need to strike a careful balance between providing employees with enough information to make an informed decision and avoiding offering financial advice.

Timing and Implementation

The PISCES sandbox regime began on 10 June 2025 and will run for five years. Authorised firms interested in operating a platform must apply to the FCA for relevant permissions, and the first platforms could become operational by the second half of 2025. Once a platform is live, eligible companies may apply for their shares to be admitted to trading. Trading will take place during fixed windows, with companies given flexibility over the frequency and duration of those periods, subject to the requirements of the platform. Lessons learned from the sandbox will inform the final design of the permanent PISCES regime.

Tax Considerations

PISCES introduces a number of important tax implications. Transfers of shares via a PISCES platform will be exempt from stamp duty and stamp duty reserve tax. However, shares traded on a PISCES platform will be treated as “readily convertible assets,” even when trading windows are closed. This means that companies must operate PAYE and account for both employee and employer National Insurance contributions when shares are acquired by employees. HMRC has confirmed that a PISCES trading window constitutes a “specified event” for the purpose of exercising options under tax-advantaged Enterprise Management Incentive (EMI) and Company Share Option Plan (CSOP) schemes. Draft legislation introduced in May 2025 will enable employers, with employee consent, to amend existing EMI and CSOP contracts to include a PISCES trading event as a trigger for exercising options without losing the associated tax benefits. Additionally, for valuation purposes, trades conducted via a PISCES platform will be treated as prima facie evidence of market value.

Conclusion and looking ahead

PISCES has the potential to offer a practical route to liquidity for shareholders and could be a valuable tool for companies looking to rationalise their shareholder base ahead of an exit. More broadly, the introduction of this framework reflects the UK government’s commitment to fostering innovative approaches to capital access in support of its long-term ambition to grow the country’s science and technology sectors. For companies able to make effective use of the regime, PISCES offers not only greater flexibility but also access to meaningful tax and regulatory advantages.