UK's FCA Approves PISCES Trading Platform, Bridging Private and Public Markets

On June 10, 2025, the UK's Financial Conduct Authority (FCA) approved the launch of the Private Intermittent Securities and Capital Exchange System (PISCES), a new trading platform designed to facilitate intermittent trading of private company shares. This initiative aims to bridge the gap between private and public markets by allowing private companies to trade shares intermittently, providing investors with greater access and offering liquidity options for early backers and employees.

PISCES represents a significant shift in the UK's financial landscape, offering private companies a regulated avenue to trade shares without the full obligations of a public listing. While proponents argue it could invigorate the UK's IPO pipeline and provide much-needed liquidity, critics express concerns over reduced disclosure requirements and potential impacts on public markets.

Background and Context

The FCA's approval of PISCES follows a series of consultations and legislative developments aimed at enhancing the UK's capital markets. Initially proposed in 2022 and endorsed by Labour Chancellor Rachel Reeves, the system is designed to address the shift in focus from public markets toward private sources of capital. Policymakers hope that PISCES will boost the faltering pipeline of London IPOs by providing a source of funding for fast-growing companies not yet at the point of flotation.

Similar platforms, such as the Nasdaq Private Market in the United States, have demonstrated the potential of private share trading systems. Since its inception in 2013, the Nasdaq Private Market has facilitated substantial trade volumes, showcasing the viability of such platforms.

Key Features of PISCES

• Trading Mechanism: PISCES will operate on an issuer-led, intermittent trading basis, allowing private companies to control when and how their shares are traded. Companies can set restrictions on who can buy their shares, a feature known as 'permissioned trading events.' This flexibility is intended to protect legitimate commercial interests, such as preventing competitors from acquiring shares.

• Regulatory Framework: The platform will function under an experimental regulatory framework until 2030, permitting adjustments based on market feedback and performance. Notably, PISCES will not be considered a "trading venue" under the Markets in Financial Instruments Directive (MiFID), and the UK Market Abuse Regulation (UK MAR) will not apply directly. This means traditional safeguards like comprehensive public disclosures and real-time regulatory oversight are replaced by a more flexible "ask-model," offering limited protections for investors.

• Disclosure Requirements: The FCA has significantly diluted initial disclosure and transparency rules in response to industry feedback. Companies are not obligated to disclose significant litigation, forecasts, strategy, environmental standards, or full details of material contracts. Additionally, there is no requirement for companies to adhere to specific accounting standards, be audited, or announce director transaction changes or major shareholder dealings.

• Market Oversight: PISCES operators are required to implement rules and arrangements to mitigate the risk of manipulative trading practices. They are responsible for monitoring, investigating, and acting against abusive trading behaviors, with the FCA supervising the functioning of operators' rules to ensure fair and orderly trading.

Stakeholder Reactions

The introduction of PISCES has elicited mixed reactions from various stakeholders. Supporters argue that the platform could stimulate the UK's IPO pipeline and provide liquidity options for early investors and employees. Simon Walls, interim executive director of markets at the FCA, stated, "The new platforms will give investors greater access and confidence to invest in exciting new companies, while early backers and employees can sell up and invest ... ."

However, venture capital and private equity executives have expressed skepticism about the necessity of PISCES and its potential impact on public markets. There are concerns that the platform may not attract high-quality businesses and could cannibalize public markets. Additionally, the relaxed disclosure requirements have raised questions about investor protection and market integrity.

Implications and Future Outlook

PISCES has the potential to democratize investment in high-growth private companies by providing a regulated avenue for intermittent share trading. This could offer investors greater access to promising firms and provide liquidity options for early backers and employees. However, the platform's success will depend on balancing innovation with investor protection and market integrity.

The experimental framework until 2030 allows for regulatory adjustments based on market feedback, but it also introduces uncertainties regarding the platform's long-term viability and effectiveness. The FCA will need to monitor the platform closely to ensure it meets its intended objectives without compromising investor protections.

In conclusion, the FCA's approval of PISCES marks a significant development in the UK's financial landscape, aiming to provide a novel avenue for private companies and investors. While it offers potential benefits in terms of liquidity and market access, it also raises important questions about regulation, investor protection, and the future dynamics between private and public markets.