The Financial Conduct Authority has published proposals for the Private Intermittent Securities and Capital Exchange System (PISCES) trading platform.
PISCES has been developed at a time when the number of listed UK companies is shrinking. The system will allow private companies to trade their securities on a controlled basis, temporarily going public to gain access to a larger funding and liquidity pool, before going private again.
The platform combines both public and private market infrastructure, offering multilateral trading and allowing for greater discretion around company disclosures. The Treasury is expected to deliver a statutory instrument to Parliament by May 2025, after which the legal framework for a PISCES sandbox will be released.
Such an environment will allow the Government and regulators to ensure the system is working successfully before a permanent regime is implemented.
Alongside the new market’s framework, the FCA is also consulting on risk warnings for investors.
Simon Walls, interim executive director of markets at the FCA, commented: “[The] new private stock market that could transform how private companies access funds and grow. 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.”
The UK Government ran a consultation on PISCES in March, publishing its response in November outlining a proposed design for the project. In the Chancellor Rachel Reeves’ Mansion House speech last month, the new platform was recommitted to.
READ MORE: Positive PISCES response from AFME and UK Finance
The London Stock Exchange, which developed PISCES, has voiced its support for this latest development. CEO Julia Hoggett commented: “We welcome the FCA’s proposals for PISCES and this next step in bringing to the UK an innovative and tailored framework that supports the funding continuum across public and private markets. We look forward to working with the FCA, HMT and other stakeholders in the coming months to deliver further opportunities for companies to access the liquidity they need to support their growth ambitions.”
PISCES forms part of broader market reforms by the FCA, introduced to improve competitiveness and investment in the UK economy.. Other agenda items include reforming the prospectus regime to make fundraising in the UK cheaper and easier, introducing flexibility around asset managers’ investment research purchases, developing a crypto regulation roadmap and launching the digital securities sandbox.
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