PISCES – the move from framework to first trades

Over the past year, the UK’s Private Intermittent Securities and Capital Exchange System (“PISCES”) has steadily moved from policy proposal to operational regime.  What began as a government initiative aimed at improving liquidity in private markets is now entering its next phase that has seen real transactions completing.

With the regulatory framework from the Financial Conduct Authority (“FCA”) now finalised, tax measures progressing through the Finance Bill and the first trades earlier this year, PISCES is transitioning from regulatory design into practical implementation.  The coming months will therefore provide the first meaningful test of whether the regime can deliver on its central objective of providing structured liquidity for shareholders in private companies.

First trading events

The first PISCES trades have taken place.  UK-based board games developer, QPlay Ltd, became the first private company to have its shares traded under the regime through the JP Jenkins Private Market, a platform operated by JP Jenkins.  QPlay’s trading event lasted only five days, illustrating the intermittent trading model that lies at the heart of the PISCES framework.

Shortly afterwards, the London Stock Exchange (“LSE”) hosted its own transaction under the regime, the first auction for its Private Securities Market.  However, rather than a private company listing its shares directly, this initial transaction involved an investment vehicle holding shares in Oxford Science Enterprises, the venture capital firm responsible for commercialising research from the University of Oxford.

This structure reflects the reality that many private investors transact through special purpose vehicles or investment structures, and the PISCES framework allows such structures to be traded through exchange infrastructure.

These early transactions are significant not because of their scale but because they represent PISCES’ transitional shift from a simple policy concept to a fully operational regime.

The regulatory framework

The legal architecture underpinning PISCES is now largely complete.

The FCA has finalised the regulatory regime governing PISCES operators through Policy Statement PS25/6.  The framework is built around a sandbox structure allowing authorised platforms to facilitate periodic secondary trading in private company shares. For a summary of the framework’s key tenets, read more from HLaw here.

A defining feature of the regime is that PISCES operates as an issuer-led intermittent market rather than a continuous exchange.  Participating companies determine when trading windows open and what securities are available for trading, allowing them to retain significant control over their shareholder base.

Unlike public markets, the regime deliberately imposes lighter disclosure requirements so as to replicate private market conditions.  Companies are required to provide core information before opening a trading window, but the framework does not impose the full continuous disclosure obligations applicable to listed companies.  However, it should be noted that platform operators (like the LSE and JP Jenkins) can choose to impose more stringent disclosure obligations on participants should they choose to do so.

These light touch disclosure requirements have generated debate about disclosure standards and investor protection.  Some commentators have raised concerns about transparency and information asymmetry.  Participation in PISCES trading events is limited to investors who self-certify as sophisticated or high-net-worth individuals, and operators are responsible for ensuring that investors meet these eligibility criteria.  The regime therefore represents a deliberate policy trade-off: widening access to private market liquidity while avoiding the full regulatory burden associated with public listings.

Nevertheless, the FCA’s policy approach remains simple as it seeks to create a market structure that enables liquidity in private company shares without effectively transforming private companies into public issuers.

Tax and legislative developments

Alongside the regulatory framework, legislative measures have been introduced to address tax barriers that could otherwise discourage participation.

In particular, transfers of shares executed through qualifying PISCES trading events are intended to be exempt from both stamp duty and stamp duty reserve tax under the new regime, removing a friction cost traditionally associated with secondary trading in UK private company shares.

Further provisions included in the draft Finance Bill 2026 are designed to ensure that participation in PISCES trading events does not jeopardise the favourable tax treatment associated with employee share option schemes.

In particular, the draft legislation proposes amendments allowing EMI and CSOP option schemes to be modified so that options may be exercised in connection with PISCES trading events without losing their tax-advantaged status.  We at HLaw have written about this in further detail here.

Companies considering participation in the regime may nevertheless need to review their constitutional documents and share option scheme rules to ensure that exercises and transfers can occur during PISCES trading windows.

Emerging market structures

One of the more interesting developments is how market participants are adapting existing private market structures to the new infrastructure.

The first transaction on the London Stock Exchange’s platform involved a tradable private equity investment company (“TPEIC”) rather than the direct trading of shares in the underlying private company.

The TPEIC holds shares in Oxford Science Enterprises, with investors trading shares in the investment vehicle itself.

This approach addresses a practical issue.  Allowing direct trading in a private company’s shares may require amendments to the company’s articles of association to permit intermittent trading windows, which could require approval by special resolution of shareholders.  Conversely, using an investment vehicle allows liquidity to be created without requiring the underlying company to amend its constitutional documents.

More broadly, these developments suggest that PISCES may support a range of liquidity structures, including direct company participation, secondary transactions facilitated by trading platforms and investment vehicle structures.  It will be up to these first mover participants to explore these possibilities and capitalise on them before platform operators, or perhaps even the FCA, catch on and seek to restrict the involvement of such structures.

Commercial expectations and uncertainties

Despite the progress in establishing the legal framework, the commercial success of PISCES remains uncertain.  A crucial element of PISCES is that it is a private market, and so there is almost no public data regarding the outcome of the PISCES trading events that have already occurred.  Coverage focuses on the operational mechanics of trading events rather than the results. As such, we cannot assess the levels of participation nor the depth of liquidity.

The regime was introduced as part of a broader effort to strengthen the UK’s capital markets and provide earlier liquidity opportunities for founders, employees and early investors in private companies.  In theory, PISCES could help address a growing issue in the venture ecosystem.  Companies are remaining private for longer, while traditional exit routes such as IPOs have become less predictable.  Secondary trading platforms could therefore provide an alternative mechanism for partial liquidity without requiring a full public listing.  However, liquidity in any market ultimately depends on investor demand rather than regulatory design.  While the trading events we have seen thus far seem promising, the trading event sample size needs to be considerably larger to establish proof of concept for the regime.

The next phase for PISCES

The coming months will mark an important turning point for the regime.  The regulatory framework is now largely in place.  Trading platforms have been authorised.  The first transactions have been completed.

The next question is whether the market will embrace the opportunity.  If PISCES succeeds in generating meaningful trading activity, it could become a significant new channel for secondary liquidity within the UK venture ecosystem, sitting somewhere between private markets and public exchanges.

If not, it may remain a technically sophisticated regulatory framework that struggles to generate sustained market participation.

Either way, the first trading events have moved the debate from policy design to practical experience and the market watches on to see if the UK’s experiment with a “private-plus” market can deliver the liquidity it promises.

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