The Financial Conduct Authority (FCA) has published the final rules for its Private Intermittent Securities and Capital Exchange System (PISCES), a new type of private stock market that will launch later this year.

Shares in private companies can be traded on the PISCES platform, which aims to provide opportunities for investors by facilitating access to growth companies.

Access to PISCES will be limited to institutional investors, high net worth individuals, sophisticated investors, and employees of participating companies.

The FCA stated that there was demand for investors to trade private company shares in an organised marketplace as companies were choosing to stay private for longer, and PISCES met this demand by allowing secondary trading of these shares.

The platform will be delivered through a sandbox, enabling the FCA to test the design before finalising a permanent regime in 2030.

This sandbox is now open and shares are expected to be traded later this year, with trading systems potentially including periodic auctions, alongside occasional and time-limited periods of continuous trading.

Firms that want to run a PISCES platform will need to apply to the FCA and, once approved, will be able to run intermittent trading events.

“This bold design rebalances risk, but it is bold risk-taking that made the UK the leading financial centre it is today,” said FCA executive director of markets, Simon Walls.

“The new platforms will give investors greater access and confidence to invest in exciting new companies, while early backers and employees can sell up and invest again.

“PISCES is the latest step in the FCA’s wide-ranging reforms to the UK’s markets to boost growth and competitiveness.”

Economic Secretary to the Treasury, Emma Reynolds, commented: “PISCES is a great example of industry, regulators, and the government working together to go further and faster on innovative reforms to strengthen UK capital markets, supporting economic growth and putting more money in people’s pockets as part of our Plan for Change.

“I welcome the FCA's announcement, which follows our legislation and opens PISCES to industry. This also builds on our announcements on a stamp taxes on shares exemption for PISCES transactions, and on employees retaining the tax advantages on eligible shares traded.”

The government confirmed it would legislate for the introduction of PISCES in November 2024, with the FCA publishing a subsequent consultation in December the same year.

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