PISCES – FCA publishes its final rules and welcomes applications from market operators

On 5 June 2025, the Financial Services and Markets Act 2023 (PISCES Sandbox) Regulations 2025 (the “Regulations”) came into force, establishing the legislative framework for PISCES operators and participating stakeholders. The Regulations temporarily modify existing legal requirements for the new platform to operate whilst it is tested within a ‘sandbox’ environment for a five-year trial period. Additionally, the Regulations confer rule-making powers on the FCA in relation to the operation and supervision of the PISCES platforms.

Following the FCA’s consultation on its proposed PISCES sandbox arrangements (as reported on in our previous bulletin here), on 10 June 2025, the FCA published its Policy Statement PS 25/6 which sets out its feedback and final rules in the new PISCES sourcebook. The rules take effect immediately and market operators can now submit applications to the FCA to operate a PISCES platform.

We summarise the key aspects of the new regime below.

What is PISCES?

PISCES is a new trading platform which hosts the secondary trading of shares in private companies during intermittent trading periods in a controlled regulatory environment. For further background on PISCES, read our previous bulletin here.

Who can operate a PISCES platform?

From 10 June 2025, all prospective operators can apply to the FCA for a PISCES approval notice to operate a platform. Operators must be either: (i) a UK recognised investment exchange; or (ii) a person established in the UK with permissions to arrange deals in investments, or to operate a multi-lateral trading facility, or to operate an organised trading facility.

It is expected that the London Stock Exchange will be one of the first operators to apply to run a PISCES platform, with the first platforms likely to be in place later this year.

Which companies can trade their shares on PISCES?

Shares in UK-incorporated private and public limited companies or overseas companies, which have not been publicly traded in the UK or abroad, can be traded on a PISCES platform. Companies must also comply with the eligibility and disclosure criteria set by the individual PISCES operator before their shares can be permitted to trade. There is no minimum or maximum size requirement for companies, although growing companies with a reasonably diversified shareholder register may benefit the most from participating.

Who can sell shares on PISCES?

Subject to any existing contractual obligations, any shareholder in the participating company may sell their shares on the platform. In practice, companies will need to consider whether to amend their articles of association to remove any transfer restrictions before participating on PISCES.

Who can buy shares on PISCES?

The Regulations provide that ‘specified PISCES investors’ may participate, including institutional investors, sophisticated investors (including self-certified) and high net worth individuals and companies (as defined under the FSMA Financial Promotion Order).

Subject to the rules of the PISCES operator, companies may also restrict who can buy their shares in a trading window - but can only do so to promote or protect their legitimate commercial interests (for example, to prevent competitors from holding a stake).

Financial intermediaries taking orders to buy shares on PISCES will be responsible for checking that their client satisfies the eligibility requirements of the relevant platform operator and are not subject to any company restrictions.

Note that companies are not permitted to buy back their own shares via a PISCES platform but the Government has noted that it will continue to keep this under review.

Can employees trade on PISCES?

Yes. Subject to any contractual restrictions, employees, directors, or other officers, of the participating company (or other company within its immediate group) are able to buy and sell shares on PISCES. Additionally, trustees of employee share schemes or share incentive plans may also trade shares in participating companies. 

When are trading events?

Trading events can occur in intermittent windows - being ‘occasional, not frequent and of limited duration’ – and so, could be held on a monthly, quarterly, annual or ad hoc basis. Subject to the operator’s rules, companies can elect the frequency of the windows, as well as their duration.

PISCES operator rules must ensure that trading event notifications are made available publicly and in a timely manner before any trading event. Such notification should disclose key information on the trading event, including the timing and length of the trading event; the date the disclosure information will be available and for how long; the relevant shares available for trading; and any relevant restrictions imposed by the operator and the company.

How will price be determined?

Subject to the operator’s rules, the company can determine a minimum or maximum price (‘price parameters’) for the trading of shares with a view to the company being able to protect and have greater control over its valuation. To the extent any such parameters are set, the FCA proposes to require their disclosure as part of the company's core disclosure information which must be available prior to a trading window (see further below for disclosure requirements).

Pre and post trade transparency data

Additionally, PISCES operators must make available the current bid and offer prices, and the depth of trading interests at those prices, as well as the instrument identification, price, volume and time of the transactions executed on the PISCES platform, as close to real-time as is technically possible, on a continuous basis during PISCES trading events. The information must be calibrated for the particular PISCES platform and the FCA has committed to working closely with operators to ensure their transparency obligations are met.

In due course, PISCES trading events should help to contribute to better price discovery and improve the understanding of private company valuations more generally, together with informing any proposed IPO workstream.

What are the disclosure requirements for PISCES companies?

A more proportionate ‘private-plus’ approach has been adopted in relation to disclosure. Companies are not subject to the UK Market Abuse Regulation, but instead must comply with a bespoke regime which requires the disclosure of similar information that would be requested in a due diligence process for a bilateral private market transaction.

PISCES operators must require ‘core’ disclosure information to be published by the company before a trading event (in accordance with the operator’s disclosure arrangements).  Broadly, this core disclosure information includes information on:

• the company’s business overview, management overview and financial information (for the past three years or for however long the company has existed, if shorter) and the employees’ shares scheme;
• the capital structure, ownership and rights in the company, together with specific information about the shares (including descriptions of the different classes and rights attached to the shares);
• any transactions by directors in shares of the company (whether or not on PISCES) within the 12 months before the trading event and details of any trading intentions of the directors in advance of the trading event;
• the material contracts and key material risk factors specific to the company and its shares;
• information about any significant change in the financial position of the company since the balance sheet date of the company’s latest published financial or interim statements;
• any material related party transactions occurring in the 12 months prior to the beginning of the trading event;
• details of whether there are any persons holding (directly or indirectly) above 25% of shares or voting rights in the company (or such lower threshold as may be set by the operator); or whether any person has the right to appoint a majority of the board or exercises or has the right to exercise significant influence or control over the company;
• the last traded price of a PISCES share and the volume of shares traded at the previous PISCES trading event, together with details of any future trading events; and
• whether any price parameters are being applied and if so, details of the floor/ceiling price; the basis of those parameters; reasons for changing such parameters applied in previous trading events; whether the valuation and price parameters were prepared by the company or an independent third party or other person (who would need to be named).

Additionally, PISCES operators must require companies to provide additional information if the core information is not sufficient to allow for the ‘efficient and effective functioning’ of its PISCES platform.

PISCES operator rules may allow companies to omit certain items of core disclosure information if they explain the legitimate reason for the omission (such as where the information is subject to third party contractual arrangements which prevent disclosure or where disclosure would prejudice their legitimate interests). The FCA has also confirmed that companies do not need to disclose the identity of end investors in certain exceptional circumstances (such as where there is a serious risk of violence or intimidation to that person).

Disclosure liability

The new PISCES disclosure liability regime will apply a negligence standard to core disclosure information. However, companies will not be required to compensate investors where their officers reasonably believed the disclosures to be true and not misleading. In respect of certain forward-looking statements provided either through core disclosure information (for example, financial forecasts and business strategy/objective disclosure) or through additional disclosures, a higher liability standard of recklessness/dishonesty will be imposed to encourage companies to provide additional information to their core disclosure information.

Are there any tax benefits available?

The Government is introducing exemptions from stamp duty and stamp duty reserve tax for transfers of shares on PISCES in regulations which come into force on 3 July 2025. It has also announced that it will legislate to allow employers with their employees’ permission, to amend existing Enterprise Management Incentive contracts and Company Share Option Plan contracts to include a PISCES trading event as an exercisable event, without losing the tax advantages the scheme offers. Additionally, the Government has published a technical note providing guidance on how PISCES trading events will interact with the tax advantaged share schemes and sets out the tax implications for employees selling their shares on PISCES.

Next steps

Market operators can now apply to the FCA for permission to operate a PISCES platform within the sandbox and it is expected that the first PISCES platforms will be open for trading later this year. In the meantime, the Government will assess the effectiveness of the PISCES sandbox during the five year trial period before determining whether and how it should support PISCES as a long-term proposition.   

Authored by Tom Brassington, Daniel Simons, Alex Parkhouse, and Danette Antao.