The London Stock Exchange (LSE) has received regulatory approval from the UK’s Financial Conduct Authority (FCA) to operate a new PISCES (Private Intermittent Securities and Capital Exchange System) platform, a new type of private stock market.
Julia Hoggett
The PISCES Approval Notice approves the LSE to operate a PISCES as a sandbox entrant.
The LSE has been involved since the UK Government opened a consultation on the world’s first regulated public-private crossover market back in March 2024, subsequently submitting its PISCES application earlier this year.
In March 2024, the UK Government announced that PISCES transactions are exempt from stamp duty, therefore reducing the cost and simplifying transactions for investors.
Other recent reforms set to bolster IPOs in the region is the government’s confirmation that existing EMI (Enterprise Management Incentive) and CSOP (Company Share Option Plan) options will be allowed to be amended – and therefore able to be sold on PISCES venues whilst retaining their tax efficient status.
IPOs in the UK have been on a decline for some time, with UK watchdogs having taken several measures in an attempt to boost participation, among these is the elimination for the need for a three-year revenue track record, and the requirement for a controlling-shareholder agreement.
The LSE’s new platform is set to boost secondary market liquidity and drive growth and investment across UK private companies, with the boost in liquidity also set to contribute positively to the IPO pipeline.
Specifically, PISCES brings together buyers and sellers to trade on an intermittent basis.
Julia Hoggett, chief executive at the London Stock Exchange, said: “Following several years of innovative development by the UK Government and regulators with active engagement from practitioners across the market, the London Stock Exchange has now taken a significant step towards the launch of our Private Securities Market later this year.”
The market expects the LSE’s launch to allow for simplified trading and settlement processes in the private sphere, with regulatory specifics set to be clarified going forward.
Read more: A deep dive into the ongoing UK capital markets reform agenda
“We are delighted to announce the first PISCES operator has been approved, marking a major milestone in our drive to boost growth and unlock capital investment,” said Simon Walls, executive director of markets at the FCA.
“We are looking forward to seeing the first transactions, seeding a competitive market that gives greater investor access to exciting growth companies. This new market demonstrates our commitment to the creation of a genuine funding continuum from the private to public markets so that businesses in the UK and around the world can be effectively supported across all stages of their growth.”