On 15 May 2025, HM Treasury (HMT) announced that it has laid the Financial Services and Markets Act 2023 (Private Intermittent Securities and Capital Exchange System Sandbox) Regulations 2025 (SI 2025/583) (the Regulations). The Regulations have been published on legislation.gov.uk along with an explanatory memorandum.

Background

The Regulations, a draft which was published in November 2024, establish the legal framework for PISCES, a new type of stock market which will facilitate the trading of private company shares on an intermittent basis. The Chancellor of the Exchequer, Rachel Reeves, had previously committed to launch PISCES by May 2025, with share trading taking place later in the year.

PISCES Sandbox

The Regulations create the framework that will enable the Financial Conduct Authority (FCA) to operate the PISCES Sandbox to test the new legal framework. They include provisions on:

  • The activity and financial instrument in scope, i.e. operating a PISCES for the trading of private company shares.
  • Who can participate in the PISCES Sandbox and general eligibility criteria, including who can apply to operate a PISCES.
  • Arrangements to ensure the FCA can make rules and appropriately supervise the PISCES Sandbox.
  • The relevant legislation being modified, disapplied or applied to PISCES Sandbox participants.

The Sandbox will last up to five years, until 5 June 2030, with the possibility of extension by HMT if more time is needed to assess whether the legislation modified under the Regulations is achieving the intended outcomes. Alternatively, HMT can make permanent amendments to legislation, subject to Parliamentary approval, before the end of the Sandbox.

Tax implications

HMT has also confirmed that it will legislate to ensure employees retain tax advantages on the share options they have, with the aim of making PISCES more attractive and encouraging even more businesses to use the platform.

Next steps

The FCA intends to publish its final rules underpinning PISCES shortly after the legislation comes into force. Those wishing to operate PISCES trading events will then be able to apply to the FCA, and HMT expects to see the first PISCES trading events taking place later in 2025.