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Developments in the London equity capital markets: PISCES and share digitisation 20 March 2026

In this third article in our series, we focus on the latest developments in relation to the new Private Intermittent Securities and Capital Exchange System (“PISCES”) for unlisted shares, including the launch by the London Stock Exchange (“LSE”) of its new PISCES trading platform, the Private Securities Market (“PSM”), as well as reporting on the progress being made in relation to digitisation of publicly traded shares in the UK.

Our previous articles in relation to developments in the London equity capital markets can be found here.

PISCES

"PISCES is a new type of regulated trading platform designed to enable intermittent trading of existing shares in UK and overseas unquoted companies on a multilateral system."

What is PISCES and why was it created?

PISCES is a new type of regulated trading platform designed to enable intermittent trading of existing shares in UK and overseas unquoted companies on a multilateral system. It has been introduced as part of the UK government’s capital markets reform agenda to bridge the gap between private and public markets, providing a regulated environment for secondary share transactions without requiring a full public listing.

The intention behind PISCES is to:

  • provide liquidity for existing shareholders (including founders, employees, and early-stage investors) in unquoted companies;
  • support growth and innovation by making early-stage investment more attractive through clearer exit routes;
  • act as a stepping stone to public markets, helping companies build governance structures and investor networks before an IPO; and
  • keep companies in the UK longer, reducing reliance on overseas capital and strengthening the UK’s financial ecosystem.

PISCES has been established as a time-limited Financial Market Infrastructure (“FMI”) sandbox under the Financial Services and Markets Act 2023 (PISCES Sandbox) Regulations 2025 (“PISCES Regulations”). The sandbox (a space designed to experiment, learn and test financial market infrastructure) will run for five years, allowing different operating models to be tested before a decision on permanent adoption.

Latest developments

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"On 26 August 2025, the FCA announced that it had approved the LSE to operate a PISCES trading platform."

  • FCA final rules and sandbox launch – on 10 June 2025, the Financial Conduct Authority (“FCA”) published Policy Statement PS25/6, which includes the PISCES Instrument 2025 and the final PISCES Sourcebook. These set out the regulatory framework for PISCES operators and modify certain FCA Handbook provisions. The sandbox opened in June 2025 and will run for five years.
  • First FCA approval: London Stock Exchange – on 26 August 2025, the FCA announced that it had approved the LSE to operate a PISCES trading platform. This marked the first regulatory approval of a PISCES market operator following publication of the FCA’s final rules and the opening of the sandbox for applications earlier in the year. In advance of the launch of the PSM, the LSE published draft new PSM Rules and proposed amendments to its existing rulebooks.
  • LSE Rulebook amendments – on 15 September 2025, the LSE published amended versions of its Admission and Disclosure Standards and Rules of the London Stock Exchange. These updates reflected the creation of the PSM and the role of Registered Auction Agents (“RAAs”) (i.e. firms authorised by the LSE to facilitate trading on the PSM).
  • Second FCA approval: JP Jenkins – on 18 November 2025, the FCA announced it had approved JP Jenkins as a second operator of a PISCES platform and confirmed that discussions are ongoing with others. It said that bringing a second operator into the market will boost competition, attract a greater variety of businesses and drive opportunities for investors.
  • Final PSM Rules and PSM Handbook – on 5 February 2026, the LSE published Market Notice N04/26 along with the final PSM Rules and PSM Handbook, which took effect on that date, establishing the regulatory framework for participation in the PSM:

•  companies must formally join the PSM before accessing  auction facilities and must provide confirmations such as shareholder approval and any required amendments to constitutional documents (Rule 2.1);

•  admitted companies must continue to meet eligibility criteria (see below) and comply with ongoing duties, including relating to cooperation and confidentiality (Rules 2.3 and Section 5);

•  companies must publish “Core Disclosure” (i.e. the minimum information prescribed by the FCA in the PISCES Regulations) ahead of each auction through the LSE’s disclosure portal, with optional voluntary disclosures possible; investors can engage directly with companies via a built‑in Q&A facility (Rules 3.4, 3.5 and 3.7);

•  the PSM Rules allow permissioned auctions, enabling companies to restrict access to trading or disclosure to certain investors to protect legitimate commercial interests, and so companies will need to determine whether any auction windows are to be conducted on a permissioned basis. All existing shareholders may sell unless contractually restricted (Rule 3.3);

•  companies may exit the PSM by giving at least three months’ notice; the LSE retains the power to terminate access where necessary;

•  the PSM Rules set out an example auction process with minimum timeframes to help companies visualise how the auction process will work; and

•  the PSM Handbook sets out supervisory guidance, including the LSE’s approach to breaches, complaints and appeals.

"On 18 November 2025, the FCA announced it had approved JP Jenkins as a second operator of a PISCES platform."

  • First PSM transaction – on 24 February 2026, the LSE announced that the first transaction on the PSM, a permissioned auction, will take place on 25 March 2026. The transaction will take place through a new type of investment structure, a Tradeable Private Equity Investment Company (“TPEIC”), a single-asset investment structure designed to hold shares in a private company. The TPEIC is entirely independent of that company but facilitates structured secondary liquidity through permissioned auctions on the PSM. Liquidity occurs at the TPEIC level within a regulated exchange infrastructure, preserving the integrity of the underlying company’s net asset value.
PSM – key features
  • Market structure

The PSM will operate as a recognised investment exchange, using the LSE’s existing trading infrastructure to enable unquoted companies to trade securities intermittently via an auction facility. Key aspects are:

    • it is not a UK-regulated market or multilateral trading facility; the UK market abuse regime does not apply directly;
    • intermediated model: investors participate through RAAs; and
    • auctions will run as extended sessions, opening at 7:50am and uncrossing at 3pm.
  • Eligibility criteria

Companies must meet at least two of the following:

    • debt or equity fundraise of at least £10m in the last three years with participation by experienced investors;
    • total assets of at least £20m (latest audited financials); and
    • annual turnover of at least £10m.

Additional factors may be considered on a case-by-case basis.

Other key features of PISCES

"PISCES facilitates the trading of existing shares; no primary capital raising is possible (although this will be kept under review)."

  • Secondary market only: PISCES facilitates the trading of existing shares; no primary capital raising is possible (although this will be kept under review);
  • Investor eligibility: only institutional investors, high-net-worth individuals, self-certified sophisticated investors, and qualifying individuals (e.g. employees) can purchase shares on PISCES; and
  • Tax treatment: transfers of shares on PISCES are exempt from stamp duty and SDRT under the Private Intermittent Securities and Capital Exchange System (Exemption from Stamp Duties) Regulations 2025 (effective 3 July 2025).
Next steps and commentary

The launch of the PSM and announcement of its first transaction in February 2026 mark the shift from design to implementation of the PISCES framework, with the LSE’s PSM now open for further applications from firms and RAAs. JP Jenkins has said it will soon be launching its PISCES-regulated JP Jenkins Private Market. The FCA and HM Treasury will monitor the sandbox outcomes, with the ability to amend, terminate or make the regime permanent earlier if appropriate.

As the LSE said earlier in 2025, private companies face distinct challenges when managing liquidity, raising capital and planning for future growth and the PSM’s aim is to help such companies tackle these difficulties throughout the different stages of their growth. The new market is designed to enhance liquidity for different types of private companies, helping them to develop their shareholder base.

Overall, the introduction of the PISCES framework is a potentially exciting new development and represents a significant step in the UK government’s efforts to reinvigorate the London equity capital markets and create a competitive and innovative marketplace. For investors, it provides more opportunities to invest in growth companies, allowing them to share in their returns. For companies, it gives stakeholders greater liquidity options that are not centred on traditional listings on a public market or M&A transactions and it should make it easier to raise funds privately outside of PISCES as the availability of a regulated secondary market should encourage investors to trade with the potential to subsequently investing further (or exiting their investment). It will be interesting to see which other providers will opt to provide a PISCES trading venue, how these will develop and what take up will be like in the market for companies and investors alike.

Our previous article in relation to PISCES can be found here.

Share digitisation

In July 2022, the UK government set up a Digitisation Taskforce (the “Taskforce”) to modernise the UK public market shareholding system by phasing out paper share certificates and streamlining settlement processes. The coexistence of paper and electronic registers has created duplication and inefficiency, prompting the Taskforce to consider a fully digital model.

"The coexistence of paper and electronic registers has created duplication and inefficiency, prompting the Taskforce to consider a fully digital model."

The Taskforce published its final report in July 2025, having published an interim report in July 2023 (see our previous article here). The final report recommended a three‑stage transition to a fully intermediated system of shareholding in which all shareholders (both institutional and retail) hold their shares in digitised form:

  • Stage 1: eliminating physical share certificates and establishing digitised registers by the end of 2027;
  • Stage 2: improving the intermediated system, to make it easier for companies to communicate digitally with their shareholders and enhance the rights of ultimate beneficial owners; and
  • Stage 3: transitioning all shares into the intermediated securities chain.

In October 2025, the Government launched the Dematerialisation Market Action Taskforce (“DEMAT”) to implement the Taskforce’s recommendations. DEMAT has been asked to:

  • report by summer 2026 with a precise implementation date for Stage 1 and guidance for industry participants;
  • coordinate with market participants to deliver the actions required for Stage 2; and
  • develop a detailed plan for Stage 3, including a view on optimal method and timing.
Commentary

Digitisation aims to make UK capital markets more efficient, reduce costs and strengthen investors’ ability to exercise their rights. By setting a clear timetable and phased structure, the reforms are intended to deliver a fully digital, transparent shareholding system by the end of the decade.

Conclusion

As with the other developments outlined in this current series of articles, these are for the most part driven by the government’s commitment to making the UK a more attractive place to trade and invest, supported by a more streamlined and efficient framework. We will continue to follow these initiatives closely as they develop.

London Trainee Justin Wong also contributed to this article.

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