Inside the FCA’s new platform for trading private company shares
PISCES (Private Intermittent Securities and Capital Exchange System Sandbox) was introduced under the Financial Services and Markets Act 2023 and came into force on 5th June 2025. Driven by HM Treasury and the Financial Conduct Authority (FCA) it aims to bridge private shares and public stock markets – giving private companies access to new funding which will enable them to grow to a sufficient size to float on the UK capital markets: a stepping-stone to foster a greater number of IPOs in future.
The idea is not new. There has been a liquidity exchange for assets held by private and unlisted businesses since 1991 – JP Jenkins. However, the new unlisted, deregulated trading platform has the backing of the London Stock Exchange, the FCA and the Government, which they hope will encourage greater interest, confidence and involvement in the sandbox which is due to run for five years.
The creation of a strong pipeline of UK growth companies is an objective that we can all get behind. But, while nobody wants to pour cold water on the initiative, not everyone believes that the new framework will work as advertised.
A mixed reception
Some industry insiders query why a company would trade private shares without the benefits and visibility of an IPO on the junior market. Private equity and venture capitalists worry it could lead to reduced quality (perhaps resulting in lower and more volatile pricing compared to existing valuations). Others fear that the opportunity to trade shares privately will drain the pool of companies in the pipeline for an IPO. Supporters suggest this type of platform works well abroad – the Nasdaq Private Market has allowed investors, including employees, to privately trade company shares since 2013, facilitating a total of $7bn of trades in 2024, according to the Financial Times.
The proof of the pudding will be in the eating. As of yet, no company has used the new platform. This year, we can expect to see some developments as institutions start to come on board and run the platform which will bring some clarity. While we wait for the first companies to take the plunge and start trading, let’s take a closer look inside PISCES.
What is PISCES sandbox?
The new framework aims to modernise UK capital markets by allowing private shares to be traded intermittently on a secondary market.
The initiative, intends to provide institutional, high-net-worth, self-certified sophisticated investors, and company employees/directors the much-needed opportunity to trade shares in private companies, thereby enabling private companies to raise capital and drive liquidity on a secondary market.
The Treasury is using the Financial Market Infrastructure (FMI) powers granted by the Financial Services and Markets Act 2023 to establish this new market. Crucially, it is not considered a stock market but rather a regulatory sandbox – an experimental environment where this new process can be tried and tested and adapt to feedback from the market in terms of how it will ultimately be structured.
PISCES platform operators can be either a recognised investment exchange or a firm permitted to carry out regulated activity under the Financial Services and Markets Act 2000. In practise, this is likely to be the core exchanges within the UK, with the London Stock Exchange leading as the first operator to be granted a PISCES Approval Notice (PAN) by the FCA.
Benefits of PISCES for private companies and investors
It is expected that this framework will generate:
- Improved liquidity – offering more tradability at determined periods, which will allow better liquidity for shareholders;
- Improved disclosure – whilst far less onerous than UK capital markets, there will still be a number of disclosure requirements, providing better transparency to the secondary market. This has largely been distilled to “core information” only, focusing on significant changes in their financial position, omitting acquisitions, details about litigation, financial forecasts, ESG metrics, and major contracts (although this can be voluntarily disclosed if desired);
- Improved investor appetite – designed and intended to attract capital from investors at an earlier stage in the company’s life cycle, without waiting for an Initial Public Offering (IPO) or other traditional exit routes.
PISCES should provide a door to initial investment for those private companies that want to start trading their shares on a platform, but aren’t yet ready for an IPO. It will also enable shareholding staff members to trade or sell their company shares. A useful but unintended consequence is that it will also provide a vehicle for some companies to de-list from the main markets while keeping their shares openly tradeable.
The down-side
While disclosure requirements will be less onerous, it is still unclear what the actual regulatory and disclosure requirements will be for companies that may trade shares on PISCES, making it difficult for private companies and their advisers to judge whether the new platform will offer real benefits. The LSE needs to show that it’s prepared to be extremely commercial and flexible with the way that companies will be treated to make it worthwhile.
Some kind of stepping-stone structure to support companies from PISCES onto the main markets would also go a long way towards removing concerns that PISCES will divert companies away from an IPO.
Finally, retail investors have been explicitly excluded from PISCES, despite their ever-increasing exposure to the markets (particularly with online platforms). This pushes the needle once more towards institutional investors that already have the ability to engage with more traditional capital markets, and limits democratisation of the market.
Key takeaways: what’s next for PISCES
Since PISCES only launched in June 2025 and won’t be fully reviewed by the UK government until June 2030, it’s far too early to judge its likely take-up and success.
PISCES is expected to evolve gradually, with adoption likely to proceed cautiously as market participants assess its practical benefits and potential risks. The first step is to get the institutions to back PISCES and run the platform in order to get market advisers on-board. Once there is a critical mass of around ten or more institutions running the platform, and a few big companies – market movers rather than minnows – start to use PISCES to trade their shares, we will have greater clarity around its effectiveness and impact.
There are hints from insiders that as early as February 2026 there will be some big announcements in this space, meaning that we shouldn’t have long to wait before we can begin to see how the market will work in practice. Let’s hope that is the case and that PISCES more than lives up to its potential.
PKF work with fast growing businesses completing complex transactions on a day-to-day basis so don’t hesitate to get in touch if you are looking to raise funds or complete an IPO.
