On 14 November 2024, HM Treasury (HMT) published the Government’s response to its earlier consultation on the Private Intermittent Securities and Capital Exchange System (PISCES).

Key message

The key message in the response is that the proposal and design of the proposed PISCES Sandbox was well received and that the Government intends to proceed.

Over the five-year sandbox period, firms wishing to run a PISCES platform will need to seek approval from the Financial Conduct Authority (FCA), and those involved in trading on a PISCES platform will be subject to modified UK regulation under the sandbox regime. HMT will use the evidence from the sandbox to decide how to legislate to make PISCES a permanent feature of the UK regulatory regime if PISCES is deemed successful.

Key features

The key features of PISCES include:

  • PISCES will operate as a secondary market, facilitating the trading of existing shares in intermittent trading windows (e.g. ad hoc, quarterly, biannually, yearly etc). It will not facilitate capital raising through the issuance of new shares.
  • Only shares in companies whose shares are not admitted to trading on a public market (in the UK or abroad) can be traded on PISCES. This includes UK private and public limited companies and overseas companies. PISCES operators will determine any admission requirements for their markets, including any minimum corporate governance requirements.
  • Only institutional investors, employees of participating companies and investors who can meet the definition of high net-worth individuals and self-certified or certified sophisticated investors under the Financial Promotion Order (FPO), will be able to buy shares on PISCES.
  • The PISCES regime will not include a public market style market abuse regime. This is a change to what was proposed in the consultation. Instead, the FCA will be given rule making powers to create a new and bespoke disclosure regime for PISCES. Under this regime, disclosures and pre- and post-trade transparency must be shared with all investors participating in a PISCES trading event but will not be required to be made public.
  • There will also not be transaction reporting requirements for PISCES. The FCA will consider whether to set rules related to record-keeping to support their supervision of the market.
  • There will be a new FPO exemption to cover PISCES disclosures, based on the exemptions available for promotions included in mandated public market disclosures.
  • PISCES operators will be able to decide whether or not shares must be recorded into a Central Securities Depository (CSD).
  • Companies will not be able to carry out buybacks on PISCES but the Government will explore whether to allow this or not at a later stage, following the initial launch of the PISCES Sandbox.

Draft SI

The Government has also published the draft statutory instrument for PISCES, The Financial Services and Markets Act 2023 (Private Intermittent Securities and Capital Exchange System Sandbox) Regulations 2025.