This summer, the UK government is set to launch PISCES (Private Intermittent Securities and Capital Exchange System), a novel private share trading platform supported by the London Stock Exchange (LSE). PISCES is designed to bridge the gap between private companies and investors by offering a flexible, organised marketplace where shares in private firms can be traded intermittently, without the full regulatory demands of a public IPO. This initiative aims to boost access to capital for startups and growth companies, while providing liquidity opportunities for shareholders such as founders and early investors.

PISCES is part of the government’s broader Plan for Change, a strategic effort to enhance the UK’s economic growth and capital markets. The platform aligns with objectives to raise living standards by creating conditions for more sustained economic expansion. Emma Reynolds, Economic Secretary to the Treasury, has emphasised that PISCES will underpin growth companies, thereby strengthening capital markets and the wider economy. The Treasury has further committed to legislation that preserves tax advantages for employees holding share options, a move intended to heighten the platform’s appeal for businesses and their staff.

The system enables participating companies to control trading parameters, including when trading events happen, who can participate, and price ranges for executions. Access will be restricted to institutional investors, high-net-worth individuals, sophisticated investors, and employees of the participating entities. This selectivity aims to balance growth facilitation with investor protection, albeit with lighter regulation compared to public markets. Companies wishing to join PISCES must obtain a PISCES Approval Notice (PAN) by demonstrating compliance plans, commercial motivations, and submitting supporting documentation. A testing environment—referred to as a Sandbox—opened in June allows live trials with real participants under close monitoring, with the goal of permanent establishment by mid-2030.

The London Stock Exchange is actively adapting its rulebook and trading infrastructure to integrate PISCES, inviting member firms to register as Registered Auction Agents. This evolution has been somewhat anticipated, with PISCES development dating back to 2021. The initiative acknowledges the trend of companies staying private longer, driven in part by IPO-related costs and regulatory complexities documented in recent years. Notable UK tech firms like Deliveroo and Wise have opted for alternative routes—Deliveroo being acquired by a US peer, and Wise moving its listing stateside—highlighting the competitive pressures on UK capital markets.

Industry observers suggest that PISCES offers a “try-before-you-buy” approach for companies reluctant or unready to pursue a traditional IPO. Legal commentators have praised it as a protected environment where private company shareholders can realise gains flexibly. It may also serve as a valuable stopgap in the current uncertainty surrounding the UK’s IPO pipeline.

While PISCES has been welcomed for its innovation, there remains some scepticism. Critics point to challenges such as uncertain investor appetite, uneven market protections, and concerns about information asymmetry which could deter cautious institutional investors. Moreover, the absence of guaranteed pricing and a formal public listing environment may create risks for both investors and advisers. However, these concerns are weighed against the potential benefits of enhanced liquidity and capital access in a market segment that has historically lacked such infrastructure.

The platform also reflects growing international trends, echoing US models like Nasdaq Private Market and Forge Global, which have successfully provided intermittent trading for private equity shares. London aims through PISCES not only to support smaller growth companies but also to counter perceptions of the city’s capital markets as slow-moving and outdated.

In sum, PISCES represents a significant step in reforming UK private capital markets by creating new pathways for investment and shareholder liquidity. Its success will depend on how well the regulatory framework, market participants, and investor confidence evolve during the ongoing trial phase before full implementation.

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Source: Noah Wire Services