PISCES: The private market with a public interest – looking ahead at what’s to come

Sam Meiklejohn and Paul Cliff, partners in equity capital markets, Gateley Legal

We last wrote of a busy summer for equity capital markets lawyers. Well, it’s been a busy autumn too, not least as a result of the budget and the commercial activity triggered before and after the event.

The private markets in the UK are sometimes overlooked, particularly in the context of wider reforms to the public markets, however in the Chancellor’s Mansion House speech on Thursday 14 November, Rachel Reeves committed the Government to establishing the Private Intermittent Securities and Capital Exchange System (PISCES), billed as an innovative new stock market in the UK, by May 2025.

PISCES will be a regulated trading platform for the intermittent trading of private company shares. Its aim is to not only provide a regulatory framework for structured trading events accessible to broad pools of investors but to act as a stepping stone to public market investment for high-growth and innovative private companies – the ultimate goal being to increase the pool of future IPO candidates in the UK.

PISCES will operate as a secondary market (in other words, companies cannot issue new shares via PISCES) and only shares in companies whose shares are not admitted to trading on a public market can be traded on the platform. This includes UK private and public limited companies and overseas companies. The PISCES regime will not include a public market-style market abuse regime and the FCA will be given powers to create a bespoke disclosure regime applicable to companies with securities listed on PISCES.

The Chancellor also announced in the budget that shares traded via PISCES will be exempt from stamp duty, likening PISCES to growth markets such as AIM and Aquis where such exemptions already apply. These exemptions are a key advantage to PISCES and will act to improve its competitiveness against certain non-UK markets.

As well as the new stamp duty exemptions for PISCES, the Chancellor also announced changes (with a mixed reception) to business property relief (BPR) from inheritance tax on qualifying shares not listed on the markets of a recognised stock exchange. These changes are expected to take effect on 6 April 2026 and introduce a cut to BPR to 50% for shares listed on AIM, while unquoted private shares will continue to benefit from 100% relief for the first £1 million of combined property. The current expectation is that shares traded on PISCES may qualify for some level of BPR. However, the specific rate at which they will benefit remains uncertain.

There is much to be optimistic about when it comes to PISCES, not least the Government’s commitment to launch and the signalled tax benefits. However, the idea isn’t entirely novel and PISCES is not dissimilar to the established matched bargain facilities (MBFs) and the Channel Islands-based TISE.

PISCES operators will want to ensure that PISCES does not become primarily a de-listing venue like the MBFs tend to be (in the main). For that, there needs to be constant communication over the coming months with stakeholders in order to develop an enticing set of benefits for companies considering listing on PISCES as a pre-public, pro-growth next step.

We welcome the PISCES initiative and watch with interest as the May 2025 target date approaches.