Regulations establishing PISCES sandbox published

The UK Financial Services and Markets Act 2023 (Private Intermittent Securities and Capital Exchange System Sandbox) Regulations 2025 were published, alongside an explanatory memorandum. The Regulations largely reflect the draft Regulations published in November 2024 (please see our update). The Regulations establish the Private Intermittent Securities and Capital Exchange System (PISCES) Sandbox, a new innovative market for trading private company shares, using the Financial Market Infrastructure (FMI) powers in the Financial Services and Markets Act (FSMA) 2023. The Regulations set the framework for potential PISCES operators to apply to the Financial Conduct Authority (FCA), to operate intermittent trading events for participating private companies and investors.

The Regulations also create the framework which will enable the FCA to operate the PISCES Sandbox and include provisions on:

• What shares can be traded on a PISCES. Only shares in companies whose shares are not currently admitted to trading on a public market (in the UK or abroad) can be traded on PISCES. This includes UK private and public limited companies (PLCs) and overseas companies.
• Who may participate in the PISCES Sandbox arrangements. Persons eligible to buy shares on PISCES include: (i) professional clients (as defined in UK MiFIR); (ii) those who meet the definitions of self-certified sophisticated investors, sophisticated investors, and high net-worth investors based on the Financial Services and Markets Act 2000 (Financial Promotion Order) 2005 (FPO); (iii) employees of participating companies and other "qualifying individuals", including consultants and employees within an immediate group of related companies; and (iv) share incentive plans and employee benefit trusts.
• The circumstances in which a person can claim compensation for untrue or misleading disclosures made by a participating company.
• The modification of various legislation for the purposes of the PISCES Sandbox, including FSMA, the Companies Act 2006 and the FPO.

In addition, the Regulations prohibit intermediaries from enabling PISCES companies to use the platform for buybacks. The PISCES Sandbox will run for five years. The Regulations come into force on 5 June.

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