The Financial Conduct Authority (FCA) has published a consultation on the regulatory framework for the new private stock market: the Private Intermittent Securities and Capital Exchange System (PISCES).

The consultation set out the regulator’s proposed framework for a new regulated trading platform for private company shares, established under legislation created by the government.

In her Mansion House speech in November, Chancellor, Rachel Reeves, confirmed the government had committed to legislate to establish PISCES by May 2025.

PISCES will be a new type of trading platform that will seek to enable intermittent trading of private company shares using market infrastructure.

The proposed regulatory framework will be established under a Financial Market Infrastructure (FMI) sandbox, created by the Treasury.

If successful, the platform could generate a pipeline of companies for a full IPO on the public market in the future, AJ Bell noted, and there will be restrictions on who can buy and sell shares, meaning it will not replace an established market such as AIM.

The FCA said that the new platform would “open the door” to more opportunities for investors to take shares in private companies.

Furthermore, as many companies are choosing to stay private for longer, the regulator stated that there was an increasing demand for investors to be able to trade shares in private companies more easily.

It noted that investment opportunities come with risk, which is why the FCA is consulting on risk warnings for investors to help them make informed decisions.

The FCA will be working with the Treasury to build the ‘right’ framework, as well as market participants, industry figures, trade bodies, and platform operators to develop a 'proportionate' framework to help support growth and innovation.

“Next year we will ring the bell on a new private stock market that could transform how private companies access funds and grow,” stated FCA interim executive director of markets, Simon Walls.

“It will offer investors more access and a greater confidence to invest in private companies and could act as a stepping stone to public markets for those firms.

“We want to work with industry and ensure we have the right building blocks in place to support investment in growing companies.”

Also commenting on the consultation launch, Economic Secretary to the Treasury, Tulip Siddiq, said: “PISCES will be an innovative new type of stock market for trading for private company shares and is a significant step forward in our reforms to capital markets.

“It will give investors the chance to get in on the ground floor of some of the most exciting companies and support the growth of those businesses.

"Today’s consultation marks a significant step towards delivery of the new market next year and sits alongside our wider programme of reforms to boost competitiveness and investment.

“That includes the FCA’s overhaul of the UK listing rules and the creation of pension megafunds which will unlock billions of pounds of potential investment in businesses.”

The consultation closes on 17 February 2025, and the FCA expects to publish its regulatory rules by May 2025.

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