The FCA has unveiled consultation plans for the PISCES private company stock exchange in response to a dearth of UK IPOs and the trend of companies staying private for longer.
The plans, announced as a key initiative in the Chancellor’s recent Mansion House speech, will create a regulated marketplace where investors can trade private company shares more efficiently, similar to existing public market trading venues.
This initiative forms part of the UK’s broader market reforms to enhance competitiveness and improve an ailing pipeline of IPOs. These reforms include streamlining the prospectus regime to reduce fundraising costs, providing asset managers with greater flexibility in research payment arrangements, and establishing a Digital Securities Sandbox for testing innovative trading technologies.
The development of PISCES (Private Intermittent Securities and Capital Exchange System) responds to a global shift in investment patterns, with private markets playing an increasingly important role in company funding. The platform aims to create new opportunities for diversified returns while providing growing companies with better access to capital.
‘Next year we will ring the bell on a 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,” said Simon Walls, interim executive director of markets at the FCA.
The Financial Conduct Authority (FCA), working in partnership with the Treasury, is developing a comprehensive framework for the platform. Recognising the inherent risks of private market investment, the FCA is implementing specific risk warnings to ensure investors can make well-informed decisions. PISCES will not be available to all retail investors, only High Net Worth Individuals and Sophisticated Investors.
To help ensure its success, the FCA is collaborating with various stakeholders, including market participants, industry leaders, and trade bodies, to create a regulatory framework that balances growth and innovation with appropriate oversight.
The FCA will start taking applications for the operation of PISCES next year and said it is keen to promote competition by considering various PISCES business models.