Trading platforms have historically been the jurisdiction of public stocks. That theoretically changes with the arrival of Pisces, the Private Intermittent Securities and Capital Exchange System.
A plan concocted by the Financial Conduct Authority (FCA), Pisces mimics a stock exchange by allowing private companies to facilitate one-off trades, without the long-term commitments of a full listing. The idea is to give investors and businesses a way to access liquidity without the full costs and regulatory demands of a traditional stock-market listing.
To do so, the platform operates slightly differently to a public market listing. There is no safety net of regulation – the idea being to interfere as little as possible with how private markets already work. Participating companies are not bound by the same rigid accounting standards, nor are they required to disclose the full range of information normally expected of a public exchange. They control when their shares are traded and who can buy them and are required to give core information only before opening a trading window.
The FCA said the platform will be delivered through a sandbox testing space, which will allow the regulator to test the design before finalising a permanent regime in 2030. The sandbox is now open, with shares likely to be traded later this year.
A dose of dynamism
Pisces is the latest scheme in the FCA’s battle to boost London’s lacklustre listing ecosystem. The UK stock market is in ailing health, having suffered a deluge of de-listings along with a dwindling appetite for IPOs. The new framework could be a helpful first rung on London’s capital markets ladder, particularly for companies that are still scaling up or refining their equity story, says Connor Cahalane, partner at RPC, the UK law firm.
“There’s a risk that Pisces could be misunderstood as a halfway house or a shortcut to listing. But it should be seen more as a stepping stone – a way to help businesses prepare for the demands and scrutiny of the main market or AIM, rather than avoid them,” Cahalane says.
Whether Pisces will be enough to revive London’s stock market remains unclear. Where it could prove useful, however, is in providing an injection of innovation that the City desperately needs.
The jury on Pisces is very much out
Pisces promises a new route to liquidity that could make it easier for UK companies to access capital without the burdens of an IPO, says Cahalane. The new framework will be especially important for earlier-stage companies, he says, many of which have looked overseas for liquidity or opted to remain private indefinitely, not because the ambition wasn’t there, but because the infrastructure at home wasn’t keeping pace with their growth trajectories.
“Pisces is another reason for investors to look at the UK more seriously, especially if it makes the private markets a bit more accessible,” says Ryan McNelley, managing director at Kroll, an advisory firm. But he disagrees with the notion that Pisces is simply a stepping stone to going public. “If a company is aiming for an IPO, they’ll likely just go straight to the heart of the matter, without needing Pisces as a springboard.”
McNelley believes the platform will be most beneficial to smaller players looking for a way out, before the point of an IPO. “Pisces is going to appeal mostly to minority investors or employees with shares – basically, anyone who’s invested in a private company but doesn’t have much control over when they’ll get their money out. For them, it’s a chance to sell earlier rather than waiting around for a full exit, which can take years. That extra flexibility could make a real difference to these investors, especially if they need cash sooner.”
Not a perfect solution
But there are reasons to be cautious about the FCA’s latest initiative. Pisces may “muddy the waters” when it comes to valuations, McNelley says. Analysts might look to trades on the platform as a guide for what a company is worth, but lead investors are unlikely to agree with that approach, he explains: “They won’t want their stake valued based on what a small shareholder sells for, especially if that person just needed cash quickly and accepted a lower price.”
As a result, transactions on Pisces will likely become datapoints that will need to be carefully reviewed before any analyst or lead investor can accept them.
According to Simon Heath, a partner at investment firm Heligan Group, the big question will be: which private companies will be seen as attractive to institutional investors? It’s likely that investors are going to want to focus on large, diversified private companies – those that tend not to need private capital investment due to their scale and success.
“While the rhetoric is that Pisces will provide a platform to access capital, I have my doubts, as institutions typically have a modest risk appetite and will always defer to more established larger and safer groups, the type of business that doesn’t need growth capital as they can access cheaper debt markets,” Heath says. “The jury on Pisces is very much out.”
Questions also remain over how exactly Pisces would tangibly boost IPO activity in the UK. Positioned as an alternative to regulated markets, it could risk undermining platforms like AIM, introducing fresh tensions into the UK’s listing ecosystem.
Another key challenge will be avoiding market fragmentation. As multiple platforms emerge to run Pisces-compliant markets, there’s a risk that the same types of private company shares could end up scattered across different trading venues, each with their own rules, says Ruth Chambers, a capital markets expert at GFT, a digital transformation consultancy. “That could make it harder for companies to manage investor interest and for investors to compare opportunities consistently. To fully realise the potential of PISCES, an evolving ecosystem with strong coordination and shared standards amongst regulators, issuers, investors, technology providers and market operators will be critical,” she says.
That said, this is not a blank slate, Chambers continues. Other markets, including the US and Singapore, have already taken steps in this direction. “Success will depend on how widely it’s adopted.”
One system cannot be expected to solve everything. Liquidity won’t materialise without broad buy-in and confidence cannot grow without transparency and safeguards.
As Douglas Grant, CEO of Manx Financial Group, an AIM-listed financial services firm, says: “For UK startups and scaleups, these reforms represent a real opportunity to secure the kind of patient capital the domestic market has too often lacked. But good will alone won’t deliver results. Regulatory clarity, fit-for-purpose investment structures, a pipeline of investable UK companies and aligned tax incentives will all be essential to ensure uptake and drive lasting economic impact.”
Pisces may open the door to risky behaviour
Others are much more skeptical. Carrie Osman, CEO and founder of Cruxy, a UK-based consultancy, believes there are serious risks to Pisces that undermine its intent.
By using intermittent auctions to determine share prices and relaxing the disclosure requirements typically expected during an IPO, Pisces opens the door to “a wave of FOMO-driven investing,” Osman says. “We’ve already seen the consequences of hype-led capital allocation, from WeWork’s implosion to Builder.ai’s collapse. These cases highlight what happens when due diligence is rushed or, worse, absent.”
The auction format and limited transparency could unfairly inflate valuations, creating the illusion of success and fuelling trend-chasing, Osman explains. “Just as worryingly,” she adds, “companies may be undervalued, losing out on fair capital for growth.”
While Pisces might eventually serve as a stepping stone to public markets, in its current form, Osman believes it risks distorting prices, undermining trust and concentrating benefits within a small pool of investors. “To truly revitalise the UK’s growth and competitiveness, we need bigger, bolder ideas that tackle systemic barriers – not just tweaks to existing capital structures.”
When it comes to boosting London’s reputation as a financial centre, this initiative could make a meaningful impact. But it must not come at the expense of financial transparency and stability. Whether the stars will align for Pisces depends on how widely it’s adopted and how effectively the ecosystem, including investors and market operators, engage with it.
Trading platforms have historically been the jurisdiction of public stocks. That theoretically changes with the arrival of Pisces, the Private Intermittent Securities and Capital Exchange System.
A plan concocted by the Financial Conduct Authority (FCA), Pisces mimics a stock exchange by allowing private companies to facilitate one-off trades, without the long-term commitments of a full listing. The idea is to give investors and businesses a way to access liquidity without the full costs and regulatory demands of a traditional stock-market listing.
To do so, the platform operates slightly differently to a public market listing. There is no safety net of regulation – the idea being to interfere as little as possible with how private markets already work. Participating companies are not bound by the same rigid accounting standards, nor are they required to disclose the full range of information normally expected of a public exchange. They control when their shares are traded and who can buy them and are required to give core information only before opening a trading window.
