The UK Financial Conduct Authority recently issued the PISCES Sourcebook, finalizing the regulatory regime for this new type of private capital market.
On 10 June 2025, the UK Financial Conduct Authority (FCA) published Policy Statement PS25/6 (PS25/6: Private Intermittent Securities and Capital Exchange System: Sandbox arrangements, which sets out its final policy position in relation to the Private Intermittent Securities and Capital Exchange System (PISCES), a new type of private capital market in the United Kingdom. PS 25/6 also contains the new PISCES Sourcebook, which sets out the FCA’s rules applicable to the establishment and operation of PISCES platforms.
The publication of the policy statement and PISCES Sourcebook follows the publication by HM Treasury of the Financial Services and Markets Act 2023 (Private Intermittent Securities and Capital Exchange System Sandbox) Regulations 2025 (the Regulations), and completes the regulatory regime which will apply to the new form of market.
A PISCES will be a secondary market, available for the trading of shares in private companies only. PISCES will offer companies more control over the marketing of their shares, and a lesser degree of ongoing regulatory compliance, than would apply on a public market. Trading events must take place on an intermittent basis, and be of limited duration. Trading will be multilateral (i.e., with multiple buyers and sellers). However, with some exceptions, retail investors will not be permitted to participate in the market.
For further information on the core features of PISCES, the rationale for its introduction, a summary of key aspects of the Regulations (including the liability regime), and certain other points to note in relation to PISCES, please see our previous LawFlash: UK Treasury Publishes Regulatory Framework for PISCES, A New Form of Private Market.
Under the Regulations, significant rulemaking power relating to the oversight of PISCES operators and the operation of PISCES was delegated to the FCA. These rules are set out in the FCA Sourcebook.
Both the Regulations and PISCES Sourcebook grant a degree of flexibility to PISCES operators as to how they will operate their PISCES platforms, including the rules governing admission of a company to the platform and the rules which will apply to a PISCES trading event. PISCES operators will be required to have a specific authorisation from the FCA, a PISCES Approval Notice (PAN).
As part of the approval process, the FCA will consider the operational model and platform rules being proposed by the applicant. The FCA has confirmed that several potential operators have approached it about potentially applying for a PAN, and therefore, assuming that more than one PISCES platform is launched, this may result in different PISCES operating with different rules governing admission to, and the marketing and sales process on, their platforms.
A PISCES operator will be obliged to monitor compliance with its platform rules by users of the platform and have procedures for investigating complaints and taking disciplinary action where breaches have occurred.
The UK Market Abuse Regulation and the wider disclosure and transparency rules applicable to Multilateral Trading Facilities (MTFs) will not apply to PISCES. Instead, the FCA Sourcebook contains bespoke transparency and disclosure rules for PISCES.
Before the start of a trading event, a PISCES company will be required to make certain core information available to all potential investors who are participating in the trading event (the “private perimeter”). The scope of the core information disclosure has been gradually reduced over the course of the consultation process, and again further in the final rules, as feedback suggested that the original list was too burdensome for a private company marketplace. The final list includes the following:
The company must also disclose the following before the start of a trading event:
However, a PISCES operator will also be obliged to ensure that its platform’s disclosure arrangements are appropriate for the efficient and effective functioning of the platform. Operators are given some flexibility as to how to achieve this, with the two most likely approaches being either:
The platform rules must require that, if a PISCES company becomes aware of material new developments, or material mistakes in disclosed information, before the end of a trading event, this must be disclosed to potential investors as soon as possible, and, in certain circumstances, the PISCES operator will need to consider whether to postpone or suspend a trading event. However, the FCA has confirmed that affected investors will not be given withdrawal rights.
Operators will be able (but not required) to adopt platform rules which permit PISCES companies to omit certain information which would ordinarily be required to be disclosed provided there is a legitimate reason for doing so.
Although both the FCA and HM Treasury have now published their final rules, we still do not have a full picture as to how PISCES will operate. This is because the regime grants a significant degree of flexibility to PISCES operators as to the rules they will adopt for admission to, and the operation of, their platforms. We also do not know how many PISCES platforms there will be, and what different approaches they may take on issues such as, for example, the use of intermediaries or how to approach the “efficient and effective” disclosure requirement.
In many ways, this is the whole point of the sandbox—to allow different approaches to be tried and see what works. However, in some areas where discretion has been granted (e.g., the level at which significant shareholdings become disclosable), we suspect that operators may elect for the least onerous rules so as not to deter potential PISCES companies.
At present, there is no clear indication as to how long the PAN approval process will take, and so it will simply be a matter of waiting for the first PISCES platform to be officially launched. There is likely to be a “first mover” advantage, as being the first platform to host a PISCES trading event will create a precedent for other companies and investors to follow.
It is also possible that we may see different PISCES operators seeking to tailor their rules to make their platforms attractive to different parts of the potential market. For example, companies which are primarily seeking to create internal equity markets for their employees may be attracted to a different regime from companies seeking primarily to provide liquidity for institutional investors.
There has been a considerable amount of discussion (both positive and more sceptical) as to the level and nature of the likely interest of companies and investors in using PISCES, as well as the potential implications of PISCES for the rest of the UK’s capital market’s ecosystem. One of the key measurements which the UK government will use to determine whether PISCES has been a success will be the extent to which PISCES companies use it as a stepping stone to implementing an IPO.
However, there remains some scepticism that the introduction of PISCES could have the opposite effect, by reducing the pressure on companies to implement an IPO to provide an exit for their major investors (and could even entice public companies with low liquidity to delist). It will be interesting to watch PISCES developments over the next several months, and indeed beyond.If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following: