FCA publishes final PISCES Sourcebook

The Financial Conduct Authority (FCA) has unveiled its eagerly anticipated final PISCES Sourcebook today in Policy Statement PS25/6. This comes quickly off the back of the Financial Services and Markets Act 2023 (Private Intermittent Securities and Capital Exchange System Sandbox) Regulations 2025 (PISCES Regulations) coming into force on 5 June (see PISCES Regulations come into force today).

The FCA's consultation on the PISCES sandbox received 35 responses from a diverse group of stakeholders, including platform operators, investors, representatives of private companies, trading intermediaries, professional services firms, and trade associations. The feedback was broadly supportive of the FCA's approach and the flexibility embedded within the proposals. The FCA has made several technical adjustments to the final rules, aligning PISCES more closely with private market practices while ensuring proportionate standards. These changes reflect the feedback received during the consultation process, maintaining consistency with the interim statement published by the FCA in April 2025.

Key areas of feedback and the FCA responses to this include:

• Disclosure - Respondents generally supported the FCA's approach, particularly the balance between flexibility and maintaining consistent minimum standards. However, concerns were raised about the volume of information required under the core disclosure proposals, prompting the FCA to streamline these requirements. Additionally, while the FCA decided against mandating a 'sweeper' model for additional company disclosure arrangements, operators retain the option to adopt this model.
• Trading events - The FCA's proposals for organising and running trading events also received broad support, with suggestions for further clarifications, such as setting out more clearly that PISCES operators may allow companies to restrict intermediary participation. The Policy Statement addresses these suggestions and clarifies policy intentions where necessary.
• Market manipulation - Regarding market manipulation and oversight, respondents emphasised the need for a proportionate role for PISCES operators, distinct from the extensive arrangements seen in public markets. The FCA has largely maintained its proposed approach and rules in this area.
• Financial Promotion Order - The FCA addresses the legislative changes to the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (Financial Promotion Order), for the purposes of the PISCES sandbox, with existing exemptions continuing to apply, as appropriate. If operators intend their disclosure arrangements to be publicly accessible, operators must consider the risk of ineligible investors accessing disclosure documents. If exempt from the Financial Promotions Order, these communications would not need to comply with the financial promotion rules or the Consumer Duty. This could result in ineligible investors being induced to incorrectly self-certify as sophisticated investors in order to buy PISCES shares. The FCA will assess how operators address this risk when assessing their application for a PISCES Approval Notice.
• Intermediary Requirements - The FCA's proposals for intermediaries promoting or distributing PISCES shares were broadly supported and align with current rules for other investments with similar high-risk profiles. While some respondents disagreed, the FCA has clarified its rationale and largely maintained its approach.

The finalisation of the PISCES Sourcebook is a key step in bringing the PISCES sandbox into operation. Stay tuned for more insights from us on this topic, including an in-depth exploration of the disclosure requirements, in the coming days.