On 26 August 2025, the FCA announced that it had approved the London Stock Exchange to operate a PISCES (Private Intermittent Securities and Capital Exchange System) trading platform (FCA Press Release). The first regulatory approval of a PISCES market operator follows publication of the FCA's final rules for the PISCES regime and the PISCES sandbox opening for applications from prospective operators earlier this year (see FC Feature 10 June 2025). In advance of the launch of its Private Securities Market later in 2025 (date to be confirmed), the LSE has published draft new rules together with changes to existing rulebooks to accommodate the new market (LSE Press Release and Market Notice N09/25). Comments on the proposed new rules should be submitted by 9 September 2025.
Background
PISCES is the legal and regulatory framework for a new type of secondary market that will enable the intermittent trading of existing shares in companies that are not admitted to trading on a public market in the UK or overseas. It has been established as a time-limited financial market infrastructure (FMI) sandbox under the Financial Services and Markets Act 2023 (PISCES Sandbox) Regulations 2025 (see FC Feature 16 May 2025). The sandbox provides a modified live environment in which a variety of PISCES operating models can be developed and tested during an initial five-year period.
Private Securities Market
The LSE will operate the Private Securities Market (PSM) as a recognised investment exchange, using its existing trading infrastructure to enable private companies to facilitate trading of their securities at intervals through an auction facility. It is not a UK regulated market or multilateral trading facility and the UK Market Abuse Regulation (UK MAR) will not directly apply to shares traded on the PSM. The market will operate on an intermediated basis, with investors' participation in an auction event conducted through a Registered Auction Agent (RAA).
The LSE will launch the PSM with the following rulebooks:
- PSM Rules – the new rules for companies seeking to join the market; and
- PSM Handbook – which sets out actions and procedures relating to how the LSE will approach compliance with the PSM Rules.
Key aspects of the draft PSM Rules are summarised in Market Notice N09/25 and include those set out below.
- Before joining the PSM – the LSE recommends various preparatory steps for prospective applicants wishing to join the PSM. These include reviewing share capital tables and share rights to identify any necessary changes and appointing a registrar to enable a company to dematerialise its shares, allowing electronic settlement through a central securities depositary such as CREST.
- Eligibility criteria – the LSE considers that the PSM's intermittent trading facilities will generally be more appropriate for companies that have had some external scrutiny of their businesses and experience of making private company disclosures to investors. Applicants must satisfy at least two of three specified criteria, namely that the company has:
- carried out a debt or equity fundraise of at least £10 million in the last three years, with material participation by independent experienced investors;
- total assets of at least £20 million (based on the company's latest audited financial statements); and
- annual turnover of at least £10 million.
The LSE may consider other factors on a case by case basis and welcomes early engagement with companies and their advisers in relation to the eligibility requirements set out in Rule 2.3.
- Disclosure rules – before an auction event, companies must make available on the PSM disclosure portal a set of specified financial and other information about the company. This mandatory disclosure requirement is limited to the minimum standard prescribed by the FCA in its disclosure rules contained in the PISCES Sourcebook set out in Appendix 1 of FCA Policy Statement 25/6. Beyond the core disclosures, the PSM Rules allow a company to disclose additional information solely at its discretion. Any voluntary disclosures must be made via the PSM disclosure portal. Omissions from the core disclosure requirement will be permitted in certain exceptional circumstances. To allow direct engagement with PSM companies, the LSE will provide a Q&A facility within the disclosure portal enabling investors to raise specific questions on information contained in the core disclosures.
- Permissioned auctions – a company may restrict access to certain investors from purchasing shares and seeing disclosure information in order to promote or protect its legitimate commercial interests. All existing shareholders may sell in a permissioned auction unless contractually restricted from doing so.
- Auctions – section 4 of the PSM Rules contains details and guidance on how to open an auction, including minimum time periods and the process companies will need to follow. Once a company has given certain confirmations to the LSE as part of its application to open an auction, final disclosures can be published and investors ask questions via the disclosure portal.
- Ongoing obligations – companies that have joined the PSM are required to meet the eligibility criteria on an ongoing basis. Companies will also need to comply with general responsibilities such as co-operation and confidentiality in a company's dealings with the LSE, as well as ensuring their directors accept responsibility for compliance with the PSM Rules. Companies are not required to maintain an adviser to liaise with the LSE.
The LSE has also published a redline version of the LSE Admission and Disclosure Standards showing minor changes referencing the creation of the PSM, together with limited proposed amendments to the Rules of the London Stock Exchange to reflect the role of RAAs in the new market. The final PSM rulebooks and consequential changes to existing rules will be published and come into effect upon the launch of the PSM. The LSE will give a further update on timing in due course.
First published on the Corporate News Service on 26 August 2025
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