The Financial Services and Markets Act 2023 (Private Intermittent Securities and Capital Exchange System Sandbox) Regulations 2025 (Regulations) came into force on 5 June 2025.
The Regulations create a sandbox environment for developing and testing the Private Intermittent Securities and Capital Exchange System (PISCES), a new type of stock market which will enable certain private investors to buy and sell private company shares at scheduled intervals. PISCES is monitored by the FCA, which published its final rules for the PISCES Sandbox on 10 June 2025.
PISCES is part of a broader effort to revitalise the UK’s capital markets, making them more accessible, dynamic, and supportive of innovation. The government hopes that the establishment of PISCES will transform how private companies offer liquidity to investors and employees. In theory, it offers a middle ground between staying private and going public, giving companies more flexibility to grow on their own terms.
What is the PISCES Sandbox?
The Regulations establish the PISCES Sandbox using the Financial Market Infrastructure (FMI) powers in the Financial Services and Markets Act 2023 (FSMA).The FMI powers allow the government to create a test environment in which certain legislative requirements may be modified or disapplied when trialling new or developing practices, with the FCA empowered to make rules within the sandbox.
The PISCES Sandbox has an initial lifespan of five years.This means that the government and FCA can monitor PISCES and refine its regulatory framework with a view to making it a permanent regime, pending further Parliamentary approval.
Key features of a PISCES platform
- Scheduled trading only:
- Trading on the PISCES platform occurs at set intervals, not continuously.
- Custom trading windows:
- Companies can choose when and how often to open trading sessions.
- Secondary marketplace:
- PISCES supports late-stage liquidity, not early-stage fundraising.
- No capital raising:
- The platform cannot currently be used to raise new capital or conduct share buybacks—though this is under review.
- Employee share monetisation:
- Enables employees and management to sell shares received as part of their compensation.
Who can operate a PISCES platform?
To run a PISCES platform, all prospective operators must apply for a PISCES approval notice (PAN) through the FCA. An application to the FCA must be submitted by a recognised domestic investment exchange, such as the London Stock Exchange, or an entity with a Part 4A permission under the FSMA (which is the approval required to operate within the UK financial sector).
Policy statement PS25/6 sets out the final rules for the PISCES Sandbox and includes requirements of operators, such as:
- Requiring PISCES companies to disclose a set of core information when using the platform;
- Organising and managing trading events in order to maintain fair and orderly markets on PISCES; and
- Implementing rules and measures to detect and prevent manipulative trading practices.
Each PISCES operator will be able to set its own rules, as well as those imposed by the FCA, for example an operator could require a minimum corporate governance standard condition of admission.
Who can trade on a PISCES platform?
PISCES is open to companies whose shares are not traded on any public market in the UK or abroad. This includes UK-incorporated private and unlisted public limited companies, as well as overseas firms.
Buying shares will only be open to certain investors, such as:
- High net worth individuals.
- Sophisticated investors.
- Employees and directors of PISCES companies.
- High net worth businesses.
- Trustees of PISCES company employee share schemes and incentive plans.
How does PISCES impact employee option schemes?
PISCES gives both employees and management the ability to convert shares received as part of their compensation, such as exercised share options, into cash. While traditional employee share option plans may impose restrictions on when shares can be sold, PISCES offers a flexible alternative to waiting for a public offering or company sale. This allows founders and employees to realise the value of their equity sooner, strengthening the attractiveness and impact of the equity-based rewards a traditional private company can offer.
Additionally, the Regulations will enable companies to modify the terms of existing Enterprise Management Incentive (EMI) or Company Share Option Plan (CSOP) awards to allow for exercise during a PISCES trading event, without losing the tax benefits associated with these schemes.
Tax treatment on PISCES transfers
In a follow-up to the Regulations, the Private Intermittent Securities and Capital Exchange System (Exemption from Stamp Duties) Regulations 2025 were presented to Parliament on 12 June 2025, taking effect from 3 July 2025. These further regulations exempt share transfers on PISCES platforms from stamp duty and stamp duty reserve tax.
Next steps
The PISCES Sandbox is now open for applications from prospective PISCES operators and those operators can also request pre-application support from the FCA.The FCA expects the first trading events to occur later in 2025.
Companies seeking to use a PISCES platform should consider both the FCA rules and any bespoke rules imposed by the operator of the platform, such as the disclosure requirements.
Catherine Sellars
Dominic Northey