PISCES: how it operates and who will benefit

PISCES – the Private Intermittent Securities and Capital Exchange System – brings into effect a new type of regulated trading platform. Shares in private companies can be traded on an intermittent basis within a regulatory framework, blending characteristics of the public and private markets.

For the first time, shareholders in unquoted companies and prospective investors will be able to transact through an orderly process, with proper price formation and limited issuer involvement. This framework only applies to secondary transactions, and PISCES cannot be used to raise fresh primary capital.

The PISCES regulatory framework is now in effect, and the London Stock Exchange and JP Jenkins have been approved as the first PISCES platform operators.

This update follows our initial briefing in respect of PISCES, which can be viewed here.

Why PISCES is important for UK capital markets

PISCES seeks to bridge the gap between existing public and private markets. The Financial Conduct Authority (FCA) sees this as an important part of its wider agenda to reinvigorate capital markets. Benefits are expected to include the following:

• For existing shareholders: PISCES offers a route to liquidity ahead of traditional exit opportunities such as an initial public offering (IPO) or a merger and acquisition (M&A) process.
• For potential investors: PISCES offers an opportunity to acquire shares in private companies, free from typical restrictions on transfer.
• For companies: PISCES offers improved shareholder base management (including the potential to broaden a shareholder base), as well as a stepping stone towards becoming a listed entity.

Who can participate in PISCES trading

Companies

In principle, PISCES is available to any private and public companies which don't have shares admitted to trading on a public market. This is subject to the right of market operators to set minimum corporate governance standards prior to admission. Where market operators set these guardrails remains to be seen.

Shareholders

All existing shareholders will be eligible to sell shares. However, companies will be able to set restrictions on the ability of employees and contractors to trade, where such employees/contractors have existing contractual restrictions around sales of shares.

Companies will be able to determine which classes of shares can be traded, as well as having the opportunity to set price restrictions (such as minimum and maximum price levels) and volume restrictions (such as restrictions on stake sizes).

Investors

Permitted investors will include institutional investors, high-net-worth individuals and sophisticated investors, or employees of the participating company. Retail investors cannot participate, although this could be subject to review in due course.

How will PISCES trading windows operate

Trading will be permitted in intermittent windows. Companies will have flexibility to determine the frequency and duration of these windows.

Companies will be subject to a bespoke new disclosure regime, with no broader prospectus required. They will be required to disclose a set of core information, designed to broadly mirror the fundamental information which an investor in a private company would expect to see.

As well as legal diligence information, these mandatory disclosures will include:

• details of the traded price and volume of shares in the last PISCES trading event; and
• price parameters for the current window, with supporting information on how these parameters were determined.

Transfer of shares made under the PISCES regime will be exempt from stamp duty / stamp duty reserve tax (SDRT).

Considerations for companies participating in PISCES

Companies will not be subject to the requirements of the UK's Market Abuse Regime, which will be welcome to private companies which can avoid the ongoing monitoring of inside information.

However, companies will be required to stand behind the core disclosures they publish and could be liable to investors for publishing misleading information as part of the required core information disclosures.

Further, companies will have to weigh up the confidentiality risks around these mandatory disclosures. In theory, these disclosures will be made 'privately' to prospective investors, but clearly there is a real risk of this information coming into the public domain.

Finally, companies participating in PISCES will not become subject to regulation by the Takeover Panel as a result.

When will PISCES benefit companies

PISCES is marketed as a bridge between the public and private markets but is clearly much closer to private market operation than public. Fast-growing private companies will no longer need an IPO to obtain some liquidity and may be less tempted by junior, growth-oriented public markets as they continue their growth trajectory.

While the core disclosures required are strenuous, companies will avoid many of the more onerous requirements of public markets, including public scrutiny and inside information monitoring. Companies will also have the ability to set guardrails on pricing and volume of trades.

Companies will further benefit from being better able to facilitate liquidity wishes for existing shareholders, particularly employees. While PISCES cannot be used for primary raises, having the ability to refresh the shareholder base will better position companies for future capital raises.

To some extent, this sort of intermediate trading has already been possible through private securities matching platforms, for example AssetMatch. But the regulatory footing of PISCES should increase the pool of prospective investors open to these opportunities.

When will PISCES benefit investors

Some investors are unlikely to be interested in PISCES. Notably, private equity sponsors will likely continue to favour direct investment processes to benefit from due diligence, arrange suitable investment rights under constitutional documents, and input into employee incentivisation.

For other investors though, PISCES will offer attractive exposure to private market opportunities. Of our client base, we see this opportunity as being particularly interesting for family office clients, who may want to diversify their private market exposure and will be able to accept the 'buyer beware' nature of private assets.

PISCES and the future of the UK's private markets

We welcome the new PISCES framework and consider that PISCES platforms will play a valuable role in UK markets. The long-term trend towards private markets is clear, and recent 'Mansion House' pensions reforms will accelerate the inflows of capital into UK private markets.

In this context, offering a new route for liquidity in the larger private companies is a welcome development for companies, shareholders and (at least some) prospective investors alike.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, November 2025