Key aspects of the FCA’s PISCES Sourcebook
On 10 June 2025, the FCA published Policy Statement PS25/6 (Private Intermittent Securities and Capital Exchange System: Sandbox Arrangements), finalising the PISCES Sourcebook. This follows the coming into force of the Financial Services and Markets Act 2023 (Private Intermittent Securities and Capital Exchange System Sandbox) Regulations 2025 (PISCES Regulations) on 5 June 2025 (see PISCES Regulations come into force today).
The PISCES Regulations created a new legal framework to establish the Private Intermittent Securities and Capital Exchange System (PISCES) as a financial markets infrastructure (FMI) sandbox. The PISCES Regulations also empowered the Financial Conduct Authority (FCA) to create the regulatory framework for, and oversee, the PISCES sandbox, including supervising the functioning of PISCES operators’ rules with regards to orderly trading and market integrity. The FCA consulted on the draft PISCES Sourcebook in December 2024, and subsequently, in April 2025, published an update on the consultation indicating it was likely to proceed with a number of changes to the draft framework. In this article, we will explore the key features of PISCES, the final PISCES Sourcebook which was published on 10 June 2025, and what comes next.
Who can operate a PISCES platform?
The PISCES Regulations state that to become a PISCES operator, a person must be either:
- a UK recognised investment exchange (RIE) under the Financial Services and Markets Act 2000 (FSMA 2000) - such as the London Stock Exchange or the Aquis Stock Exchange; or
- a person established in the UK with FCA permission under Part 4A of FSMA 2000 to carry on one or more of the following regulated activities:
- arranging deals in investments;
- operating a multilateral trading facility; or
- operating an organised trading facility.
Firms falling within the criteria who wish to operate a PISCES platform must apply to the FCA for permission. If successful they will receive a PISCES Approval Notice (PAN). Prospective PISCES operators who are not yet authorised and need to apply for a new permission (or those who need to vary an existing permission) can engage with the FCA’s Authorisations team’s Pre-Application Support Services (PASS).
For more information on the process of applying to operate a PISCES platform, including the information and documentation required to be submitted to the FCA, and to submit a complete application for a PAN, see PISCES Sandbox: apply to run a platform.
Which companies can have their shares traded on a PISCES platform?
Companies will be eligible to join a PISCES platform provided they are not admitted to trading on a public market in the UK or elsewhere. Therefore, all UK-incorporated private limited companies and unlisted public limited companies could join a PISCES platform. PISCES is also not limited to UK companies. Private companies incorporated in other jurisdictions, without a listing on a public market, would also be eligible. There is also no requirement for the company to be headquartered in or have a particular nexus with the UK. However, PISCES operators are able to set their own additional eligibility criteria, which may limit the companies that are eligible to join a particular PISCES platform.
Who can buy shares on a PISCES platform?
The PISCES Regulations limit the categories of investors that may acquire shares on a PISCES platform to:
- Professional clients, as defined in Article 2(1)(8) of MiFIR;
- High net-worth individuals;
- High net-worth companies, unincorporated associations etc;
- PISCES certificated investors;
- Self-certified sophisticated investors;
- Qualifying individuals, including employees of and those providing consultancy and managerial services to the PISCES company or its immediate corporate group;
- Trustees of employee share schemes; and
- Trustees of share incentive plans.
Can a PISCES company place restrictions on who can participate in a trading event?
A PISCES operator may provide in its PISCES platform rules flexibility for companies to retain control over the types of investors that can acquire or sell their shares via its PISCES platform, however, the PISCES Sourcebook requires certain limitations to be included. Specifically, a PISCES company may not:
- enter into arrangements to restrict an investor from participating in a trading event to buy shares unless the restriction is imposed for the purposes of promoting or protecting the legitimate commercial interests of the company;
- restrict an investor from participating in a trading event to sell shares unless such restriction is consistent with existing contractual obligations that are applicable to the investor as a qualifying individual; or
- enter into arrangements to restrict a participant or member of the PISCES (i.e. financial intermediaries) from participating in a trading event unless the restriction is consistent with MAR 5.3.1R(4) - where the restriction is consistent with the PISCES operator’s obligation to have published, transparent and non-discriminatory rules, based on objective criteria.
How will trading events operate on a PISCES platform?
PISCES platforms will operate intermittent trading windows, the frequency of which will be determined by the company, within parameters set out in the PISCES operator’s rules. This intermittent trading model is designed to balance liquidity with stability, offering companies and investors a structured yet flexible trading environment. The PISCES Sourcebook assumes that the parties to a sale will not interact directly with the PISCES operator during trading events but will instead liaise via an intermediary, such as a broker, as is the case with public markets. If any potential PISCES operators are looking to operate a non-intermediated model, with direct interaction between the parties and the operator, the FCA may need to modify the PISCES Sourcebook.
Regarding the settlement of trades via a PISCES platform, operators have discretion as to whether they require a company to have its shares in a dematerialised form (rather than maintaining physical share certificates). Where the PISCES operator requires shares to be dematerialised, electronic settlement will be processed via the CREST system.
What corporate information will a PISCES company have to disclose in relation to a trading event?
The UK Market Abuse Regulation (MAR), which applies to the UK public markets, does not apply to PISCES. Instead, the PISCES Sourcebook provides a bespoke disclosure regime for the PISCES Sandbox, under which, PISCES companies are required to disclose the following specified core information before a trading event. The disclosures must be provided sufficiently in advance of the trading event to enable those entitled to access it to analyse and understand the information, taking into account the type and nature of the investors.
|
Category |
Summary |
|
Business Overview Rule 2.3.2(1) |
A business overview of the PISCES company, which must include, amongst other things, a description of the corporate and organisational structure, a description of its principal activities, products or services and the markets it operates in and, if material, a summary of the extent to which it is dependent on current patents, licences, industrial, commercial or financial contracts and manufacturing processes. |
|
Management Overview Rule 2.3.2(2) |
A management overview of the PISCES company, which must include, amongst other things, a summary of the management structure and details of directors and senior management (including their previous experience and qualifications and role in the PISCES company). In addition, if relevant, the disclosure must include details of any potential conflicts of interest between the duties of the directors or senior managers to the PISCES company and their private interests and/or other duties, and any convictions for fraudulent offences, insolvency events or public incriminations and/or sanctions in at least the previous five years. |
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Financial Information Rule 2.3.2(3) |
Financial information must include statements for the past three years or for as long as the PISCES company has existed (if shorter) and where financial statements have been audited, the auditor’s reports. Where the last financial statements relate to a period that is more than 12 months prior to a trading event, the PISCES company must provide interim financial statements or management accounts which relate to the period up to at least 12 months prior to the trading event. Where management accounts are produced, the disclosure should include a statement identifying them as such and that they are not subject to the same standards applicable to financial statements. |
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Capital Structure, Ownership, Rights Rule 2.3.2(4) |
Information on the capital structure, ownership and rights in the PISCES company, which must include provisions in the articles of association (or equivalent) relating to the governance of the PISCES company and the rights of shareholders and material provisions from any shareholders agreement. |
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Share Information Rule 2.3.2(5) |
Information about the shares in the PISCES company which must include, amongst other things, a description of the share capital, including the amount of issued share capital, details of any shares not representing capital, details of any convertible securities, exchangeable securities or securities with warrants. In addition, the disclosures should include details of the rights attaching to shares (i.e. voting and pre-emption rights etc.), different share classes and the respective seniority of such classes, the PISCES company’s dividend policy and any restrictions on the future transferability of the shares. |
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Employee Share Scheme Rule 2.3.2(6) |
Information about any employee share schemes, which must include a description of any rights to acquire shares granted to the directors pursuant to an employee share scheme, a description of the shares and the aggregate number and value of those shares. In addition, the disclosure should detail any commitments of the PISCES company to issue new shares to satisfy awards granted pursuant to an employee share scheme and any commitments to support an employee share scheme by funding a trust established for the benefit of employees and/or other members of the workforce. |
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Directors’ Transaction Rule 2.3.2(7) |
Information about transactions by the directors of the PISCES company, which must include details of any transactions in shares in the company, whether on a PISCES platform or not, within the 12 months prior to the PISCES trading event. In addition, the disclosure must include details of any trading intentions of directors in PISCES shares that relate to the trading event, including whether it is an intention to buy or sell shares, the likely volume and optionally the reason for the trade. PISCES operators’ rules do not need to require a company to update disclosures if those intentions change after a trading event begins. However, PISCES operators must ensure that companies include a statement in their disclosures that information about trading intentions may not be updated after the beginning of a trading event so this is clear to investors. |
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Material Contracts or Agreements Rule 2.3.2(8) |
An overview of contracts or agreements (if material to the business or profitability of the PISCES company). Contracts entered into in the ordinary course of business are excluded. |
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Previous Share Capital Raises Rule 2.3.2(9) |
Information about any share capital issued by the PISCES company in the previous three years, including the date, issue price, share class and amount raised. |
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Risks Rule 2.3.2(10) |
Information about key material risk factors specific to the PISCES company and its shares. The risk factors should be tailored, and generic risk factors should not be included. In addition to these risk factors, the PISCES operator is required to ensure that all disclosures disseminated through its PISCES disclosure arrangements are accompanied by a prominently displayed risk warning (Rule 3.7). The full text of the risk warning is too long to replicate in full here but in essence provides the following warning: “Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you are unlikely to be protected if something goes wrong.” |
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Significant Changes Rule 2.3.2(11) |
Information about any significant changes in the financial position of the PISCES company since the balance sheet date of the latest published financial or interim statements. |
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Major Shareholders Rule 2.3.2(12) |
Details of any of the following in relation to the PISCES company: · any person who holds (directly or indirectly) above 25% of shares or voting rights; · any person who holds the right (directly or indirectly) to appoint a majority of the board of directors; · any person who exercises, or has the right to exercise, significant influence or control; and · any trustees of a trust or members of a firm that, under the law by which it is governed is not a legal person, meet any of the other specified conditions (in their capacity as such) in relation to the PISCES company, or would do so if they were persons, and the person has the right to exercise, or actually exercises, significant control over the activities of that trust or firm. As an alternative to providing such disclosure, a PISCES operator’s rule may require the PISCES company to disclose its PSC register instead. However, this would only be applicable where the PISCES company is required to maintain a PSC register, so it would not for example apply to overseas incorporated companies. Where the PISCES company knows of a person to whom any of the major shareholder disclosure criteria above applies but, after taking reasonable steps, cannot identify them, a statement confirming it cannot identify any such person and explaining why must be disclosed. The PISCES company does not need to disclose the identity of a person falling within this rule where the activities of the company or the characteristics or personal attributes of the person associated with the company will, in the reasonable belief of the PISCES company, put the person at serious risk of violence or intimidation. |
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Price Parameters Rule 2.3.2(13) |
Confirmation of whether price parameters are being applied to the trading event and, if so, details of any floor or ceiling prices; the basis on which the price parameters were determined and the reasons for any changes to the price parameters applied in previous trading events. In addition, the disclosure should confirm whether the valuation of the PISCES shares and the price parameters were prepared by the PISCES company or by an independent third party, including the identity of that third party. Where the PISCES company prepared the share valuation or price parameters with the agreement of another person (e.g. a key shareholder), this must also be stated. |
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Trading Events Rule 2.3.2(14) |
Details of any commitments that have been made to hold future PISCES trading events, including when and how often they will be. |
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Last PISCES Trading Event Rule 2.3.2(15) |
Details of the traded price and volume on the last PISCES trading event |
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Related party transactions Rule 2.3.2(16) |
Information about any related party transaction which occurred within 12 months prior to the beginning of the trading event and are material to the financial performance of the PISCES company or the rights attached to the PISCES shares. |
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Contact point for disclosures Rule 2.3.2(17) |
Contact details of a person at the PISCES company in relation to the core disclosed information and any additional information disclosed. |
Subject to the rules of the relevant PISCES operator, a PISCES company may omit core information in exceptional circumstances, including where the company does not have access to the information, where disclosure would likely prejudice the legitimate interests of the company, or where contractual arrangements with other parties prevent such disclosure.
However, PISCES operators’ have an overarching responsibility to ensure appropriate disclosure arrangements are in place which enable PISCES companies to provide additional information required for the efficient and effective functioning of the PISCES. The PISCES Sourcebook does not mandate how PISCES operators need to deal with the requirement to provide additional information and instead sets out various models which PISCES operators may adopt and guidance on their implementation. Suggested models include:
- a ‘sweeper model’ - where a PISCES operator’s rules would require the disclosure of any other information which the directors of the PISCES company consider relevant for investors in making their decision to trade in PISCES shares; and
- an ‘ask model’ – where the PISCES operators oversees arrangements that facilitate requests by PISCES investors for more information, for the purposes of assisting them in deciding whether to trade in PISCES shares, and the corresponding disclosures by the PISCES company.
Will corporate disclosures be made public?
Unlike disclosures made by companies on the UK public markets, information disclosures made by PISCES companies regarding trading events will not be made public. The PISCES operator is required to make arrangements that allow investors to access company disclosures via a secure environment. The PISCES operator must ensure that all persons entitled to access the relevant trading event have equal access to the disclosed information, at the same time and free of charge.
These arrangements are also subject to certain technical requirements, such as implementing procedures to manage disruptions in access to disclosed information, adequate record keeping and the secure handling of disclosures. This secure access model is designed to protect sensitive information while ensuring that investors have the information they need to make informed decisions.
What’s next for PISCES?
Potential PISCES operators are now able to formally submit their applications for a PAN and receive formal feedback from the FCA on their operating models and rulebooks. We will continue to track the progress of PISCES and provide further updates once PISCES operators’ rulebooks are released.
