PISCES: preparing private companies for intermittent share trading

How PISCES works

PISCES is a new UK trading mechanism designed to allow private companies to hold regulated, time‑limited windows in which their shareholders can sell existing shares to eligible investors.

Who operates PISCES?

PISCES is a regulatory regime under which FCA‑approved operators run their own trading platforms. These operators include:

• The London Stock Exchange, approved to operate a PISCES platform through its Private Securities Market.
• Other established private‑markets operators with experience managing liquidity for unlisted companies.
• Potential new entrants including fintech platforms seeking to provide structured liquidity.

Each operator must obtain a PISCES Approval Notice from the FCA and must comply with the PISCES Sourcebook. Operators determine the auction model, how settlement works, who can participate and how orders are managed subject to FCA oversight.

What happens in a trading window?

• The company selects the trading window choosing timing, duration and format.
• Eligible investors are set (limited to institutional investors, high‑net‑worth or sophisticated individuals and employees).
• The company provides core disclosures including financial information and capital structure to all participants simultaneously who then have an opportunity to review and engage in Q&A.
• The operator runs the auction, usually a batch auction, although time‑limited continuous trading is also permitted.
• Settlement occurs through the operator’s regulated systems ensuring orderly trading.

No trading is permitted between windows meaning PISCES introduces structured liquidity without creating a continuous market.

Not quite a “light‑touch” regime

Although PISCES is intended to operate as a “private‑plus” environment with proportionate disclosure, the FCA’s final rules impose mandatory core information requirements for each trading event including financial information, capital structure, material contracts, director dealings and risk factors. These disclosures must be delivered simultaneously to all participating investors albeit within a private perimeter.

This creates a dynamic, not dissimilar to a mini‑prospectus, process: companies must ensure consistency, version control and robust verification. It should not be assumed that PISCES allows for casual disclosure; in practice, companies will need IPO‑standard discipline, even though the information is not made public.

Transferability and articles: hidden structural traps

One feature is that shares must be freely transferable at the moment of the trading event. This interacts awkwardly with many existing articles of association and shareholder agreements which often contain:

• pre‑emption on transfer;
• director consent requirements;
• drag/tag mechanics; and
• restrictions linked to leavers or employee share schemes.

If these are not reconciled with operator rules, a company may unintentionally breach its constitution or simply be unable to admit shares into a window. The law does not adapt itself to PISCES; the company must adapt its constitutional documents.

Market Abuse

Another point to be aware of is that PISCES does not apply the UK’s Market Abuse Regulation. Instead, a bespoke event‑specific regime applies.

This offers companies flexibility but places considerably more weight on operator oversight and internal controls. Companies cannot assume “lighter” means “simpler”: they must still manage inside information, employee trading and selective disclosure risks in a world where the rules are new and less judicially tested.

Intermittent windows can create unpredictability

While companies control the timing and frequency of windows, the market dynamic within each event is harder to predict. Auctions depend heavily on participation levels, investor education and the quality of company disclosures. Operators can set pricing parameters and eligibility rules but execution risk remains largely with the company.

For boards used to bilateral private transactions, the introduction of multilateral auction mechanics is a material cultural shift. Companies will need to plan communications, manage employee expectations and sometimes be comfortable with prices that reflect a thin market rather than intrinsic value.

Tax advantages are helpful but should not drive strategy

Trades executed within PISCES benefit from Stamp Duty and SDRT exemptions. This is a meaningful advantage over traditional private transfers.

HM Treasury has also confirmed that employees exercising EMI or CSOP options in connection with PISCES events will retain tax benefits.

However, tax relief alone should not govern whether a company uses the regime. The operational burden, governance uplift and internal readiness checks may outweigh the fiscal benefit for companies with small shareholder bases or limited appetite for periodic liquidity.

What private companies need to know: a practical process checklist

In practice, a private company preparing for its first PISCES window must ensure it can answer four core questions:

1. Are our articles of association and shareholders’ agreement PISCES‑compatible?

Companies must review and amend pre‑emption provisions, transfer restrictions, leaver provisions, shareholder consent mechanics and other restrictions. Shares must be freely transferable for the duration of the trading event.

2. Can we produce PISCES‑level disclosures reliably?

Companies will need:

• a clean capitalisation table;
• up‑to‑date financial information;
• a schedule of material contracts;
• accurate director‑dealings information; and
• a repeatable internal verification process.

3. Do we understand how the auction will affect employees and investors?

Clear communication is essential as employees may assume they will be able to sell their shares. In practice, this will depend on who is eligible to participate, the level of investor demand and the pricing limits set for the auction.

4. Are we staffed and prepared for each window?

PISCES should be approached as a recurring regulated process rather than a single trading event. Each window requires financial reporting alignment, legal sign‑off, coordinated communications and sufficient internal resource to interface with operators and manage regulatory requirements.

Who is PISCES really for?

PISCES is likely to suit:

• Large technology scale‑ups with substantial employee equity participation;
• Fast‑growing consumer brands approaching IPO‑readiness;
• Fintech, healthtech and business‑services companies with institutional backers; and
• Private, mid‑market groups whose shareholders need structured liquidity but do not want to trigger a full sale process.

These companies typically have the governance maturity and shareholder complexity for which PISCES provides clear value.

Governance and internal readiness: the real determinant of success

What observers have increasingly noticed is that PISCES is not a “plug‑and‑play” mechanism. The companies most likely to benefit will be those that:

• maintain near‑public‑standard record‑keeping;
• have discipline around financial reporting cycles;
• run structured employee‑communication programmes; and
• can allocate resource to manage each trading window as a regulated event.

Companies hoping for simple liquidity may find that the preparatory work (from amendments to articles of association to disclosure verification and platform onboarding) is substantial.

A useful tool, but not a panacea

PISCES is best understood as a regulatory framework for structured secondary transactions, not a replacement for public markets or traditional private deals. It offers opportunities for liquidity, employee retention and indicative valuation setting but only where the company’s governance infrastructure can support repeated, quasi‑public trading events.

PISCES is a welcome addition to the UK capital‑markets toolkit but its success for any individual company will turn not on the regime itself but on the company’s internal readiness, constitutional alignment and risk appetite. Companies should approach it with enthusiasm tempered by realistic planning and with careful legal preparation well before their first window.

For advice on preparing for PISCES, assessing suitability or planning your first trading window, please contact us with any questions.

This article is for general information purposes only and does not constitute legal advice or a comprehensive statement of the law. Specific legal advice should always be sought in relation to individual circumstances.

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   • Nigel Taylor

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   • Corporate

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   • Maria Nadarajah

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