Share Schemes and PISCES: A new employee marketplace?

The announcement of the Private Intermittent Securities and Capital Exchange System (PISCES) was first made in 2022, and since then we have had a consultation, draft legislation and in June the final FCA rules on how the scheme will work. 

There will now be a “sandbox” testing phase until June 2030 when the treasury must report back to Parliament on whether the system is working as envisaged. 

The whole premise of PISCES is to provide a private stock market for investors and companies to transact in private company shares – essentially connecting buyers and sellers for fast growing companies. 

PISCES will be very different to a normal public market listing and it is envisaged that there will only be intermittent trading events. There will also be distinct differences to the main markets, in particular companies using the system will have control over:
•    When their shares are traded; 
•    Who can buy their shares; 
•    Set the min/max share price; 
•    Control what information is available to shareholders. 

So what does this mean for company share schemes? 

Historically, market places for private company shares has always been a bit of a challenge, companies have looked at share buybacks, EBT’s or other shareholders to provide the market place outside of a transaction and PISCES could help to solve this problem. 

That said it is likely that companies will want to restrict who can buy their shares, perhaps to current employees, and therefore the buyer pool becomes very limited. 

One area where you could potentially see a benefit is around the operation of an employee share scheme. 

For example, if a private company has an EMI or CSOP scheme, the PISCES market could provide a way for employees to sell their shares on, once exercised. It is helpful in this regard that HMRC has this week published amended legislation for EMI/CSOP plans that allows alterations to be made to current plans to allow a trading event on PISCES to be a relevant exercisable event. 

The alteration in a plan's rules once it is in play is something that, as advisors, we always discourage to avoid the plan ceasing to qualify or for it to be deemed to be a grant of a new option. So this concession from HMRC to allow plans that were granted prior to Royal Assent of the Finance Bill 2025-26 to be changed is pleasing to see, and clients are encouraged to consider whether this change should be made to their share plans. 

However, care should be taken to ensure that the only change is to allow PISCES to be an allowable exercisable event. 

In terms of the impact for Private Equity structures, as most will not qualify for an approved scheme, the above change is not likely to be terribly relevant, and in any event I would imagine most PE investors would push back on introducing any form of third party market for the shares. 

Next steps

Get in touch with Bishop Fleming to explore how PISCES could support your employee share schemes and private company planning.