UPDATED 22/07/2025 - The UK government's launch of the PISCES trading platform signals a potential turning point for private companies, particularly those navigating the longstanding challenge of shareholder liquidity. 

For employees and early investors, the inability to realise value from shares in unlisted companies has often been a sticking point, especially as IPOs and trade sales become less frequent. The Private Intermittence Securities and Capital Exchange System (PISCES) aims to change that. 

The new PISCES framework introduces regulated, intermittent trading windows during which qualifying private companies can permit shareholders to offer their shares for sale on the PISCES platform to a restricted group of investors. Companies will set their own terms on pricing, disclosures, and who can participate, allowing them to retain control while providing liquidity.

Latest developments

The Financial Conduct Authority ("FCA") published its final rules for operating PISCES with Policy Statement PS25/6 on 10 June 2025, following the Treasury's publication of the finalised legislative framework for PISCES in May 2025. The FCA sandbox is now open for applications from platform operators, and the FCA expects the first companies to begin using PISCES to trade shares later this year. 

The tax trap for EMI schemes and CSOPs – now addressed

For companies using tax-advantaged employee share option schemes like EMI and CSOP, the PISCES model initially raised a conundrum. Would tweaking share scheme rules to allow participation in PISCES trigger a "regrant" under HMRC rules, potentially disqualifying tax benefits?

Fortunately the government has answered that with a resounding "no." Legislative changes will allow existing EMI and CSOP options to be amended so that employees can exercise them on a PISCES trading event without losing their tax -advantaged status. This is a crucial development that removes a major roadblock to potential wider uptake of shares by employees, and the draft Finance Bill published on 21 July 2025 supports this change.

Next steps for employers

Despite the recent publication of the final rules governing the PISCES sandbox, for now uncertainty remains around the feasibility of using PISCES in practice, in relation to both employee share schemes and more broadly.  PISCES is not without its sceptics; the enabling legislation is deliberately light touch, a move intended to encourage innovation but which some fear may leave room for misuse. 

Many employers will wish to sit tight and wait until the first test cases emerge over the coming months before taking any actions, and in the meantime review the requirements of the regime. In any event employers are advised not to rush into making any changes to their employee share schemes without carefully considering the desirability and viability of using PISCES in connection with their employee share schemes – for example, is it desirable for employees to be able to liquidate all of their shares at this time in the first place, in effect taking away lock-in? 

Employers will also need to work through the legal, tax and practical issues that arise if they wish to change their schemes to permit exercise in connection with a PISCES trading window (or multiple PISCES trading windows) – for example, are sufficient arrangements in place to deal with employees exercising their options and acquiring shares, but not being able to immediately sell their shares on PISCES?  Although PISCES will be a trading platform, it will not guarantee that a ready buyer for the shares will be available.  Amendments to the company's articles of association may be advised to address the scenario in which employees hold shares rather than options. 

Uncertainties remain for now

While PISCES in principle has been welcomed by many as a long overdue liquidity mechanism for private company equity, much depends on how user-friendly and trusted the regime proves to be. 

If successful, PISCES could reshape the private company ecosystem. Where it can improve liquidity, it may enhance employee incentivisation, attract new investors, and offer an alternative route to value realisation that does not depend on a traditional exit. But the road ahead requires careful navigation, particularly for those balancing employee expectations with broader commercial considerations and compliance, and for many this still remains a watch and wait.