FCA PISCES Rules - a wave of reform

FCA publishes final PISCES rules

The FCA has published its final Private Intermittent Securities and Capital Exchange System (PISCES) sandbox rules for platform operators.

PISCES is a new type of platform where shares in private companies can be traded on an intermittent basis. PISCES aims to allow private companies to reach a broader range of investors, support growth and ultimately act as a stepping stone to public markets. The FCA's rules, together with the PISCES Sandbox Regulations which were published in May 2025, will set the regulatory requirements for PISCES. The temporary sandbox, due to expire in 2030, allows the FCA to test the platform's design before determining with the Treasury whether to transfer PISCES into permanent legislation. See here our snapshot of the principal features of the PISCES regulatory framework.

The FCA's PISCES rules follow the 'private-plus' approach outlined in its consultation paper, building on existing private market practice, whilst seeking to maintain appropriate safeguards.

We set out below an overview of key focus areas.

Disclosure arrangements

Core and additional information

The FCA is maintaining the general approach to disclosures as proposed in its consultation. PISCES companies will be required under operator rules to disclose certain core information. Core information constitutes (amongst other things) a business and management overview, certain financial information, information on a PISCES company's shares and information about any employee share schemes. The general disclosure requirement will be supplemented by a requirement for PISCES operators to have arrangements in place that require or facilitate the provision of additional information, to the extent the core disclosures do not provide sufficient information for investors. This is based on an overarching obligation for PISCES operators to ensure their disclosure arrangements are appropriate for the efficient and effective functioning of their market.

In line with the 'private plus' mindset, the FCA has pared back the core information disclosures. Streamlining measures include the removal of forward-looking information on financial forecasts and business strategy on the basis that this would be a disproportionate ask for PISCES companies and some companies could consider such information as too commercially sensitive to disclose, the removal of sustainability disclosures (though companies should provide sustainability-related information in their business overview or key material risk factor core disclosure information where such information is material to their business or its prospects) and the removal of disclosure on significant acquisitions or disposals.

'Sweeper' model

As signalled in its early consultation update (see here our update), the FCA is not mandating a 'sweeper' model for additional company disclosures, which would have required a PISCES company to disclose any other information known to it that it considered relevant to investors. This was generally considered to be overly burdensome for private markets. Operators are, however, free to adopt this approach to the extent it is considered appropriate for their market.

Legitimate omissions

The FCA's initial proposals required PISCES operators to permit companies not to provide core disclosure information where a legitimate explanation is given as to why – for example, disclosure may prejudice a company's legitimate interests. Noting that the feedback on this proposal was varied, the FCA is, subject to certain exceptions, affording operators the discretion to make legitimate omissions optional and is also allowing legitimate omissions to apply for both core and additional information disclosures, provided the relevant criteria are met - namely, a statement specifying the information that has been omitted and a legitimate explanation for the omission in summary form.

Liability

The PISCES Sandbox Regulations apply a negligence standard to the core information disclosures. A higher, recklessness standard applies to additional information (i.e. non-core information disclosures), including forward-looking information.

Trading events

Price parameters

As per the FCA's consultation proposals, under the final rules PISCES companies can set floor and/or ceiling prices for their PISCES shares. However, the rules have been amended to reflect the fact that a PISCES company may agree price parameters or valuations with key investors. Where a company prepares a valuation or price parameters, the core information disclosure must provide whether this was effected with the agreement of another person and if so, the identity of such person.

Trading events

In keeping with private market practice, the FCA rules provide that PISCES operators will be able to allow companies to impose restrictions on who can buy and sell their shares. The FCA has added clarificatory guidance on restricting investor access to trading events.

Oversight

Operators will be required to put in place rules and measures to mitigate the risk of manipulative trading practices on their markets (including practices that give or are likely to give false or misleading impressions or signals as to the market in or the price or value of PISCES shares) and will be responsible for monitoring, investigating and acting against such practices. In line with this, PISCES will not have a civil or criminal insider dealing regime. The fact that the UK Market Abuse Regulation does not directly apply to shares traded on a PISCES platform will be highlighted in the PISCES Market Risk Warning that PISCES operators will be required to include as part of any disclosure information they disseminate on their platform.

Next steps

The PISCES sandbox is now open. Prospective PISCES operators can submit a complete application for a PISCES approval notice via PISCES@fca.org.uk.

PISCES trading events are expected to commence later this year.