UK Financial Conduct Authority publishes consultation on the regulatory framework for PISCES

The U.K. Financial Conduct Authority has published a consultation on the regulatory framework for the Private Intermittent Securities and Capital Exchange System (PISCES), the proposed new platform for trading shares in private companies. The draft legislation implementing the PISCES sandbox ( the Financial Service and Markets Act 2023 (Private Intermittent Securities and Capital Exchange System Sandbox) Regulations 2025 were published in November 2024. The consultation contains the FCA's proposed rules and guidance for the PISCES sandbox, as well as alternative options the FCA considered in its policy development process.

The consultation considers: (i) the rules and arrangements for PISCES companies disclosing information; (ii) how PISCES operators must organize and run trading events; (iii) the PISCES operators' role in monitoring trading on their platform; (iv) the consumer protections that the FCA considers should apply to enable retail investors, who are individuals and eligible to trade on PISCES, to identify investments that suit their circumstances and attitude to risk; (v) how existing rules and guidance in the Handbook apply to persons when they are participating in PISCES, where not covered by other chapters; and (vi) the proposed fees for PISCES operators. Appendix 1 contains the draft PISCES Sourcebook, which sets out new rules and guidance. Appendix 2 contains consequential changes to existing provisions of the FCA Handbook.

The deadline for comments is February 17, 2025. The FCA aims to publish made rules after the HMT has laid its final statutory instrument before Parliament, which is expected in May 2025.  The FCA plans to publish further information in early 2025 about preapplication engagement opportunities for firms interested in applying to be a PISCES operator.

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