The UK is set to introduce a groundbreaking new type of stock market that will enable investors to trade shares in privately-owned companies, marking a shift from traditional public exchanges such as the London Stock Exchange (LSE).
Named Pisces — short for Private Intermittent Securities and Capital Exchange System — the platform could begin trading within the next few months, following approval of its regulatory framework by the Financial Conduct Authority (FCA).
The FCA aims for Pisces to bolster the UK economy by broadening investment opportunities and channeling fresh capital into growing businesses.
How Pisces Works
While Pisces has officially launched, trading cannot start until licensed operators set up their platforms. This new market is designed to meet the growing trend of companies staying private longer, providing investors access to shares they might otherwise never be able to purchase. It also offers a chance for shareholders in private firms — including employees receiving shares as part of compensation packages or early-stage investors — to liquidate their holdings.
Pisces operates within the FCA’s sandbox environment, allowing a five-year period of testing and development to refine the system and establish permanent rules by 2030.
Individual operators will run the trading platforms, similar to how investors currently use banks or apps to trade publicly listed stocks and funds. These operators will have flexibility in the types of private companies they list, potentially organizing by company size, industry sector, or share sale timing. Share purchases might be available quarterly, annually, or during specific windows tailored to company needs.
Risks and Cautions for Investors
Although the new market has been widely welcomed, investors should be aware of increased risks compared to investing in publicly listed companies. Retail investors will need to self-certify their investing experience as part of safeguards under existing legislation.
Public stock markets benefit from extensive regulation, which private companies typically avoid. Consequently, some rules—such as those against insider trading—may not apply in the same way on Pisces, creating potential information asymmetries between retail investors and professional institutions.
Official Reactions
Emma Reynolds, Economic Secretary to the Treasury, praised Pisces as a prime example of collaboration between industry, regulators, and government to accelerate innovative reforms that strengthen UK capital markets. She noted that Pisces complements recent announcements on stamp duty exemptions and tax advantages for employee shares.
Simon Walls, Executive Director of Markets at the FCA, called Pisces “a bold design” that rebalances risk, emphasizing that such risk-taking has historically helped establish the UK as a leading financial center. He highlighted the platform’s potential to increase investor access and liquidity for early backers and employees of private companies.
Pisces marks the latest effort by the FCA to reform the UK’s financial markets, aiming to enhance growth and competitiveness in the coming decade.
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