FCA publishes policy statement PS25/6 setting out final rules for the PISCES sandbox: framework now set out for operation of secondary share sale platforms in the UK

On 10 June 2025, the Financial Conduct Authority (“FCA”) published Policy Statement PS25/6 with its final rules for operating a Private Intermittent Securities and Capital Exchange System (a “PISCES”).  The Financial Services and Markets Act 2023 (Private Intermittent Securities and Capital Exchange System Sandbox) Regulations 2025 had been laid before Parliament on 15 May 2025 and came into force on 5 June 2025.  Draft regulations had been published in November 2024 and largely survived in the form now in force, although with some notable trimming back of the disclosure regime.

The rule book has now been set for operators wanting to run PISCES platforms on which shares in participating private companies can be bought and sold by participating investors during intermittent trading windows.  Operators will sit in a regulatory sandbox and work under the no-doubt close supervision of the FCA, an experiment planned to run until 2030.  The FCA expects shares to begin trading on PISCES later in 2025, and the London Stock Exchange is expected to be amongst the first cohort of operators working in and from the sandbox.

Shares to be traded on a PISCES platform cannot be admitted to trading on a public market in the UK or abroad.  Nevertheless, the UK government is hoping that PISCES trading can help bridge the gap from private to public and bolster the fortunes of later stage technology companies who are otherwise selling out pre-IPO to American buyers in particular.  There is no size requirement for the companies wanting to participate.

Most retail investors are prohibited from trading.  Professional clients, sophisticated investors and high net-worth investors and certain other categories of persons thought suitable by the FCA to be bearing the risks will be eligible to buy shares on a PISCES.  So too are trustees of employee share schemes and share incentive plans as well as employees of, consultants to or officers of participating companies (or grouped undertakings).

Disclosure as a topic in the context of PISCES has been much discussed, and the regime proposed in the draft regulations of 2024 has been substantively cut back.  PISCES operators must ensure that companies using their platforms are disclosing a prescribed set of core information and have robust arrangements in place to do so.  Core disclosures include (slimmed down from the 2024 proposals):

• A business and management overview
• Financial information (financial statements for the past three years or since incorporation if a shorter period, and any significant post-balance-sheet changes along with the auditors’ reports, if any)
• Details of the company’s capital structure and rights attached to shares
• Identities of any 25% major shareholders or controllers
• Information on any employee share schemes and equity incentive schemes in place
• Any recent transactions by directors and their trading intentions for the upcoming trading event
• An overview of the company’s material contracts (excluding ordinary course contracts) and any key risk factors for the business
• If applicable, any price parameters set for the trading event (e.g. a minimum or maximum price set by the company) and the basis for that valuation
• Details of the last PISCES trading event (if any) – i.e. pricing, volume, etc – and whether the company is committing to hold future trading events

Note the lack of any ‘sweeper’ requirement to disclose any information that might be thought material to a reasonable investor, a point very familiar to public companies but dropped from the 2024 draft.  The FCA in PS25/6 say: “Given strong feedback that a mandatory ‘sweeper’ could be disproportionately burdensome for companies using a PISCES, we are not requiring a mandatory sweeper. Based on the feedback, we still consider the burdens of a mandatory sweeper would materially outweigh the benefits. PISCES operators can still implement a sweeper and determine how they apply it, if they consider a sweeper to be appropriate for their PISCES.”

Requirements to disclose forward looking information and approach to sustainability also didn’t make it into final draft of the regulations.

PISCES platforms will not be trading venues under the UK’s Markets in Financial Instruments Regulation and the UK MiFIR transparency requirements will not apply to shares traded on PICES platforms.

If the platforms take off, we expect the current standard of disclosure to continue to be hotly debated and for there to be further fine tuning of the regulations going forward.  PISCES does not have a civil or criminal insider dealing regime (the UK Market Abuse Regulation does not apply because PISCES platforms are not UK MAR-regulated trading venues) – i.e. trading on insider information will not be illegal per se – but the criminal market manipulation regime still applies (ss 89 and 90 of the Financial Services Act 2012) as do existing regimes for anti-money laundering and counter-terrorism, and fraud cuts through all of course.  As the FCA say in PS25/6, public market standards were not used as a starting point for designing the regulatory framework.

From the reverse perspective, those parties making disclosures should consider their obligations of confidentiality under their employment contracts, any shareholders’ agreement and more generally to tread carefully when making disclosures.

Provisions were added to and expanded in this final version of the regulations as regards:

• the prohibition of buybacks – PISCES platforms will not be used to organise share buy backs or for capital raising purposes generally;
• platform operators’ obligations to check investor eligibility and that they qualify as “specified PISCES investors” (see above as to the types of person treated as such);
• HM Treasury’s power to direct that the FCA imposes restrictions on platform operators; and
• powers of the FCA to modify, suspend or cancel a person’s approval to operate a PISCES.

As a further incentive for participants to engage with PISCES, on 3 July 2025, the Private Intermittent Securities and Capital Exchange System (Exemption from Stamp Duties) Regulations 2025 (SI 2025/666) come into force to provide that share transfers on PISCES platforms will be exempt from stamp duty and SDRT.  Read thoughts from HLaw on that HERE.

What platforms now seek to enter the sandbox, and whether any companies choose to engage (or are pushed by their investors to engage) remains to be seen, but we at HLaw will continue to follow the topic.

This Insight piece was written by Henry Humphreys with input from Alina Merchant Mohamed.  If you have questions about PISCES and secondary share sales generally, or are an FCA-approved firm wanting to apply to enter into the PISCES sandbox and need legal support, do please reach out to the team.

All the thoughts and commentary that HLaw publishes on this website, including those set out above, are subject to the terms and conditions of use of this website.  None of the above constitutes legal advice and is not to be relied upon.  Much of the above will no doubt fall out of date and conflict with future law and practice one day.  None of the above should be relied upon.  Always seek your own independent professional advice.

Humphreys Law