PISCES Regulations come into force today

Today marks the coming into force of the Financial Services and Markets Act 2023 (Private Intermittent Securities and Capital Exchange System Sandbox) Regulations 2025 (PISCES Regulations). The PISCES Regulations create a new legal framework to establish the Private Intermittent Securities and Capital Exchange System (PISCES) as a financial markets infrastructure (FMI) sandbox and give the Financial Conduct Authority (FCA) broad powers to operate the PISCES sandbox arrangements. In this article, we will explore PISCES, its purpose, key features and what comes next. 

What is PISCES?

PISCES is a new type of regulated trading platform that will facilitate the secondary trading of unquoted company shares on an intermittent basis. A PISCES platform will be operated by certain entities authorised by the FCA, who successfully apply for a PISCES Approval Notice (PAN).

What is the rationale for PISCES?

Companies are remaining private for longer periods and PISCES aims to address the liquidity needs of companies with a growing shareholder base and to provide a market platform for the easier trading of shares in private companies. 

PISCES is designed to make early-stage investment and employee share remuneration more attractive and prevent premature sales of companies by providing a mechanism for some shareholders to realise their investment without offering all shareholders a full exit (trade sale, private equity buy-out or IPO). 

PISCES may also provide unquoted companies access to a broader range of new investors at an earlier stage without joining public markets. This in turn could help to ensure that companies do not seek to list on public markets too early, whilst also giving them exposure to a bespoke market platform and disclosure regime ahead of any IPO. While PISCES does not itself permit unquoted companies to raise capital; it would offer new investors the possibility of an exit at a future trading event. 

While the London Stock Exchange Group is keen to promote PISCES, there has been some scepticism as to how effective it will be given that there are already well-established trading platforms used by some larger private companies and formerly public quoted companies that have delisted. These include AssetMatch and JP Jenkins, both of which offer a securities matching platform.

What are the key features of a PISCES platform?

PISCES platforms will have several key features, including:

• Secondary market: They can only operate as secondary markets for the trading of existing shares. PISCES will not facilitate the sale of new shares and therefore will not be a means of raising new capital.
• Shares: Only shares without transfer restrictions can be traded.
• Intermittent trading: Trading events must be intermittent, meaning “occasional, not frequent and of limited duration”. These could be regular, scheduled events (e.g. quarterly, half-yearly etc) or ad hoc.
• Disclosure: The UK Market Abuse Regulation (MAR) will not apply to PISCES. Instead, PISCES will have a bespoke disclosure regime, under which PISCES companies will be required to disclose specified core information. PISCES operators will have an overarching responsibility to ensure appropriate disclosure arrangements are in place for the proper functioning of their markets and for monitoring for abusive trading practices.
• Multilateral trading: They must enable multilateral trading (i.e. where multiple buying and selling interests in financial instruments can interact).
• Investors: The PISCES Regulations limit the categories of investors that may acquire shares on a PISCES platform to sophisticated investors (including those self-certified), high-net worth individuals, institutional investors, 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.
• Share buybacks: Currently, share buybacks are not permitted via a PISCES platform, but HM Treasury will keep this under review.

What’s next for PISCES?

The PISCES Regulations coming into force today is the first in various steps required before we see any trading on a PISCES platform. 

The FCA is empowered to create the regulatory framework for, and has oversight of, the PISCES sandbox, including supervising the functioning of PISCES operators’ rules with regards to orderly trading and market integrity. On 17 December 2024, the FCA published a consultation (Consultation Paper 24/29: Private Intermittent Securities and Capital Exchange System (PISCES) – sandbox arrangements) (CP24/29) setting out its proposed regulatory framework for PISCES, including a draft PISCES Sourcebook. Subsequently, on 10 April 2025, the FCA published an update on CP24/29 indicating it was likely to proceed with a number of changes to the proposed framework, particularly regarding the disclosure regime that will apply to companies with shares traded on a PISCES platform. It also invited prospective PISCES operators to submit proposed operating models and rulebooks for potential feedback, pending publication of the FCA’s Policy Statement, including the final PISCES Sourcebook, expected later this month.  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) were also made welcome to engage with the FCA’s Authorisations team’s Pre-Application Support Services (PASS).

Once the final PISCES Sourcebook is published, potential PISCES operators will be able to formally submit their applications for a PAN and receive formal feedback from the FCA on their operating models and rulebooks. Potential PISCES operators, most notably the London Stock Exchange Group, are now actively engaging with private companies which may be interested in joining a PISCES platform, and it is speculated that the first trading event could happen before the end of the year.

When will the PISCES sandbox end?

The PISCES sandbox is expected to operate for a period of five years from today. The Treasury is required to report on the operations of the PISCES sandbox by 5 June 2029 and may look to implement further legislation to make PISCES arrangements permanent at or before the end of the 5-year period.