PISCES private investing market: how it works, trading windows, potential risks and more

With a new private market poised to make its mark in the UK, we examine what this means for investors.

Following a surprise announcement from the Financial Conduct Authority (FCA), a new private stock market will launch in London later this year.

Known as PISCES (Private Intermittent Securities and Capital Exchange System), it aims to give savers the right to buy and sell shares in businesses that are still private.

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How PISCES works

Under the current system, businesses traditionally go public on markets such as the London Stock Exchange, meaning savers can buy shares for the first time.

This is typically known as an Initial Public Offering (IPO).

However, going public can bring significant costs for businesses, including regulatory pressure, disclosure requirements, and the need to meet quarterly earnings expectations.

PISCES will offer a middle ground – allowing companies to open up their shares to investors occasionally, without the need for such scrutiny.

Trading windows

Unlike the usual stock markets where shares trade continuously, PISCES will allow purchases on private companies during specific time periods.

Businesses will also have the ability to set prices for their shares and choose which investors can participate in these trades.

This helps maintain some control over ownership and valuation.

As of PISCES’ launch, it will limit access to high-net-worth individuals, sophisticated investors, and employees of participating firms.

Why PISCES could be a gamechanger

If you 're an investor, PISCES opens a new avenue to access promising companies before they go public.

It could also offer opportunities for early backers, founders, and employees who hold private shares.

This is important because private shares are typically more difficult to sell.

In terms of companies, PISCES offers a flexible way to raise capital and manage ownership without the burden of full public listing rules.

It also acts as a stepping stone for businesses not quite ready for a public market but wanting to expand investor access and liquidity options.

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Impact on other markets

While PISCES is a welcome innovation, some analysts warn it could affect other markets, such as the London Stock Exchange’s or the Alternative Investment Market (AIM) – the hub for smaller-growth companies.

AIM is celebrating its 30th birthday this month, but has struggled in recent years with fewer new listings and many companies leaving the market.

Following the launch of PISCES, some firms could look elsewhere.

The potential risks?

Like everything, PISCES isn’t free from potential downsides.

Money will be invested in private companies, which generally means less transparency, lower liquidity, and potentially higher volatility compared to public companies.

However,  the FCA has stressed that investors will receive information about risks before trading.

At launch, PISCES trading will happen through a “sandbox” –  a controlled testing environment allowing regulators and firms to trial the platform before it becomes permanent, expected around 2030.

The sandbox approach allows learning and adjustments to make sure the platform works well for all participants.

While retail investors won’t be able to trade initially, the potential for broader access in the future means this is a space worth watching for those interested in early-stage investing.

What’s next?

The FCA’s sandbox for PISCES is already open, with the first trading expected later this year.

The Treasury has also introduced legislation to support the platform, including tax incentives for share transactions and employee share schemes.

As the market evolves, investors and companies will be watching closely to see how PISCES performs and whether it can deliver on its promise to create a more flexible and supportive capital markets environment in the UK.

If you’re interested in growth investing or private companies, it’s worth keeping an eye on PISCES as it develops.

The platform could open new doors in the UK’s capital markets landscape and change how private company shares are traded in the years ahead.

Have your say

Would you be interested in investing via PISCES? Or would you prefer to wait until it’s tried and tested?

We’d love to hear your thoughts in the comments below.