PISCES 101 — The Private Intermittent Securities And Capital Exchange System

What you need to know about the world's first regulated exchange for the trading of shares in private companies.

1. What is PISCES?

The Private Intermittent Securities and Capital Exchange System (PISCES) is a UK government–backed initiative designed to enable private companies to offer and trade their existing shares in a controlled, intermittent manner — through designated trading windows — without undergoing a full public listing. Developed in partnership with the UK's Financial Conduct Authority (FCA) and the London Stock Exchange (LSE), PISCES will operate through the LSE's Private Securities Market (PSM) and aims to strike a balance between providing access to liquidity and enabling companies to benefit from certain features of the public markets — such as broader investor participation and price discovery — while preserving the flexibility and control associated with remaining private.

PISCES will initially run within the UK's Financial Market Infrastructure Sandbox for a five-year period beginning in late 2025. The regulatory framework governing the initiative was finalised with the laying of the applicable rules before UK Parliament on 15 May 2025. These rules are set out in the Financial Services and Markets Act 2023 (Private Intermittent Securities and Capital Exchange System Sandbox) Regulations 2025, which came into force on 5 June 2025.

2. Why should companies and investors consider using PISCES?

PISCES offers companies:

• A means to provide liquidity to early investors and employees as a unique alternative or interim liquidity event to a premature IPO or M&A exit.
• A valuable tool for employee retention and reward strategies, particularly for growth-stage companies that rely heavily on equity-based compensation, by providing a liquid market for vested shares.
• Access to a broader investor base, including institutional investors and certified high-net-worth individuals (HNWIs) or sophisticated investors, than companies could otherwise access on their own.
• A more structured framework than the unregulated private secondaries market that bridges the gap between private and public markets with an automated auction and price discovery process and use of the LSE's settlement systems — without the on-going disclosure and compliance burdens associated with being public.
• In contrast to attempts by other markets to create something similar (e.g., the Nasdaq Private Market (NPM)), PISCES will enable companies to have significant control over timing of trading windows, eligibility of investors that can participate and pricing — all within a standardised framework with regulatory oversight.

PISCES offers investors:

• A platform through which they can access liquidity from investments outside an IPO or M&A exit, which can be particularly helpful in an environment where companies are staying private for longer and acquisitions are harder to execute.
• Earlier access to exciting, high-return opportunities that were traditionally only available through private placements or venture capital channels, with no stamp duty transfer tax payable on the purchase of shares through the platform.
• A regulated trading environment with price discovery mechanisms, dematerialised settlement via the LSE and an information disclosure portal based on standardised rules which enhance transparency and reduce execution risk compared to traditional bilateral private secondary markets.
• A standardised, FCA-regulated framework for information disclosure that enables investors to more effectively compare investment opportunities across issuers — a significant improvement over the more fragmented and one-to-one nature of private secondary markets.
• Access to a broad universe of companies from across the globe (it is not limited to just UK-incorporated companies), thereby enabling investors to diversify their portfolios and identify compelling opportunities across markets — within a single, regulated framework that supports consistent evaluation and execution.
• For UK pension funds: A structured and regulated route to meet the Mansion House Accord's commitment of allocating at least 10% of all main default fund assets in their defined contribution schemes to unlisted equities by 2030 (with at least 5% going to UK private markets).
• For family offices and HNWIs: Better visibility across a wider pool of private assets than they would have had easy access to otherwise, thereby unlocking further investment opportunities.

3. What are the key features of PISCES?

• No primary capital raising: PISCES facilitates only secondary trading, not new share issuances.
• Company controls:
  • Intermittent trading windows: Companies schedule trading events based on liquidity needs (e.g., quarterly, yearly or one-off). The company remains private between auctions.
  • Trading restrictions: Companies can impose trading restrictions, including requiring a minimum or maximum price and setting a minimum and/or maximum total volume of shares that can be transacted in an auction.
  • Ability to limit investor universe: Companies can determine the investors or categories of investors that may participate in any trading window and receive information about the company. Companies must set out a legitimate business reason for excluding investors (e.g., excluding competitors).
  • Type of securities: Companies can choose the class of securities placed in any auction.

• Disclosure package:
  • Public, but not so public, disclosure: Companies must provide core information to approved investors, but not to the wider public, through a disclosure portal facilitated by the LSE. No market updates are required between auctions.
  • Online disclosure portal: Through its online disclosure portal, the LSE will facilitate the provision of information only to eligible investors that have been invited to participate in a trading window.
  • Core disclosures: Core disclosures include (among others) business and management overviews; financial statements for three years (or for as long as the company has existed, whichever is shorter); information about significant changes since the date of the last published financial information; information on the capital structure, ownership, and rights in the company (e.g., employee share schemes and major shareholders); information about material contracts; and information about key material risks specific to the company and its shares.
  • Ability to provide additional or more limited information: PISCES operators can request participating companies to disclose additional information if the core information is not considered sufficient to adequately inform investors. Subject to certain exceptions, a company may choose to omit information if disclosure would prejudice a company's legitimate interests, it does not have the required information, contractual arrangements prevent disclosure or the information is not relevant.
  • Q&A facility: The PSM is expected to house a Q&A facility for investors to ask questions (visible only to the company) once the core disclosures have been published. Any responses will be made available to all investors for full transparency.
  • Liability: PISCES is a "buyer beware" market. As in private markets, investors are expected to seek redress on disclosure matters directly from the company based on a statutory liability regime implemented and overseen by the FCA.

• Investor eligibility: Participation is limited to approved investors under the UK financial promotion rules. Investors' access to the LSE information disclosure portal will be managed through brokers, called Registered Auction Agents (RAAs), who will be responsible for checking the eligibility of investors and enabling their participation in an auction.
• Auction choices: Companies will be able to choose between an "open auction," which is accessible to all eligible investors on the PSM (providing the widest possible distribution and access to a global population of eligible investors), or a "permissioned auction," which restricts access to certain eligible investors.
• Public market settlement infrastructure: The PSM will use the same auction technology that is used to open and close the LSE's public markets. Shares will need to be dematerialised into CREST through a broker with RAA status for electronic settlement, eliminating the need for share transfer forms. Settlement will occur on a T+2 basis.
• No public market regulation post-PISCES transactions: PISCES transactions will not be subject to the UK Market Abuse Regulation, UK Takeover Code or public transparency rules.
• No stamp duty: Transfers of shares on a PISCES platform will be exempt from all UK stamp duty taxes.
• Regulatory sandbox: Temporary legislative modifications allow for flexible implementation over the next five years.

4. Who can use it?

Private Companies

• Companies must be privately held.
• Eligible companies can be UK-incorporated or overseas companies.
• Companies must meet two of the following three criteria:
  • £10 million of capital raised in the past three years;
  • Total assets greater than £20 million, or
  • Turnover greater than £10 million.
• In addition, companies must comply with the following board requirements:
  • The company's board of directors must seek shareholder approval to participate on the PSM.
  • There must be a minimum of two directors on a company's board.
  • There must be appropriate financial accounting and reporting expertise on the company's board and/or its senior management.

Approved Investors

Participation in PISCES trading windows is limited to approved investors, including: institutional investors, employees and officers of participating companies, HNWIs (as defined under the UK Financial Promotion Order 2005) and self-certified or certified sophisticated investors. These categories are designed to ensure that participants have the financial knowledge and capacity to engage in private market trading responsibly.

Other Participants

In contrast to public market transactions in which banks are typically engaged as intermediaries or underwriters, PISCES can facilitate direct transactions between companies and investors. Nonetheless, investment banks and brokers may develop their service offerings, such as pre-auction marketing support, to assist companies and investors.

5. How is PISCES different ...

... from a private secondary transaction?

• Regulatory oversight: Unlike the private secondary market, PISCES will operate under an FCA-regulated framework ensuring regulatory oversight, investor protection and market integrity.
• Designated trading windows: The timing and pace of a private secondary transaction depends on negotiation dynamics with prospective purchasers of shares, rather than being time-controlled by the company.
• Standardised due diligence requirements: Instead of prospective purchasers in private secondary transactions carrying out extensive due diligence exercises on a stand-alone basis, prospective purchasers will receive standard core disclosures, access to Q&A responses raised by all investors and more information symmetry through PISCES.
• Simplified contractual negotiations: Unlike traditional private secondary transactions, which often involve bespoke negotiations over price, warranties, indemnities and transfer restrictions, PISCES facilitates trading through an automated auction process that significantly reduces the need for company-by-company contractual negotiation, as pricing is determined transparently and settlement is standardised through the LSE's infrastructure. This simplification can lower transaction costs, reduce legal complexity, and make liquidity events more scalable for both companies and investors.

... from a public markets transaction?

• No continuous trading: Only periodic, company-scheduled auctions.
• Lower regulatory burden: Fewer disclosure obligations and no on-going regulatory obligations that are required for listed companies.
• Greater cap table management: Companies retain more control over investor access and cap table.
• No capital raising: It is not possible to raise primary equity on PISCES.

... from Nasdaq Private Markets?

• Company control: Companies have more controls available to them on the PSM (e.g., setting price parameters, dictating trading window timetables and being able to exclude certain investors from participating due to commercial reasons).
• Settlement mechanics: NPM typically relies on bilateral or brokered transactions, and does not use a centralised auction or public market infrastructure for settlement.
• Disclosure: NPM does not operate under a standardised disclosure regime enforced by a public regulator in the way that the PSM will.

6. How can PISCES be useful for employees in particular?

PISCES could be attractive for employees of private companies in several important ways:

• Liquidity for employee shareholders: Employees often receive equity as part of their compensation but, in private companies, these shares are typically illiquid. PISCES will allow employees to sell shares and realise value without waiting for an IPO or acquisition, thereby enabling employees to benefit from vested options earlier in a company's life cycle. Employees can also buy shares in their employing company without needing to be HNWIs or self-certified sophisticated investors to trade them on the PSM.
• Enhanced retention and motivation: The ability to monetise equity more regularly can improve employee morale, strengthen retention (especially in competitive sectors like tech and life sciences), and make equity awards a more meaningful part of total compensation.
• Broader access to capital markets: By participating in a regulated, FCA-backed platform, employees gain exposure to a more transparent and structured market, potentially improving pricing and investor confidence in their equity.

Participation in PISCES may require changes to share restrictions (e.g., lifting transfer restrictions), which could have tax implications for employees — especially if shares were previously subject to restrictions under UK or US tax rules (e.g., Income Tax Earnings and Pensions Act 2003 or SEC tender offer rules).

7. What are some of the potential drawbacks?

• Liquidity concerns: Without sufficient trading volume, PISCES may not deliver meaningful liquidity.
• Valuation uncertainty: Periodic auctions may not reflect true market value, risking mispricing.
• No capital raising: Companies cannot issue new shares, limiting its appeal for growth funding.
• Market fragmentation: Could support companies staying private for longer, although arguably they will be more mature and better accustomed to public market dynamics when they eventually IPO.
• Governance and legal complexity: Companies must be willing to amend their articles of association and shareholders' agreements to allow for free transferability of shares during trading windows, potentially affecting control and tax status.
• US securities law risks: US-based employees selling shares may trigger SEC tender offer rules if not carefully managed. Legal advice will be needed.
• Fees and liability: Companies whose shares are sold using the PISCES platform will not receive proceeds from the sale. The secondary nature only of the platform may therefore impact how incentivised companies may be to incur expenses largely for the benefit of shareholders and prepare the required information for disclosures that they are ultimately responsible for.

8. Sounds interesting — what do I do next?

PISCES represents a bold step in modernising the UK's capital markets, offering private companies a flexible, regulated path to liquidity alleviating a key driver for a premature IPO or M&A. While it introduces new opportunities for companies and investors alike, careful consideration of governance, legal and tax implications is essential.

Reach out to us to discuss how PISCES may play a role in your liquidity journey.