Latest news with #PrivateIntermittentSecuritiesandCapitalExchangeSystem
Yahoo
a day ago
- Business
- Yahoo
What is Pisces? What you need to know about new UK stock market for buying shares in private companies
A new type of stock market will open in the UK later this year, allowing investors to trade shares in privately-owned companies — as opposed to those that are publicly owned and listed, for example on the London Stock Exchange (LSE). Referred to as Pisces — which stands for a Private Intermittent Securities and Capital Exchange System — the first trading could begin on the new stock market in the next few months after the Financial Conduct Authority (FCA) approved the rules around it. The FCA hopes the move will support the UK economy by giving more choices to the investment community and attracting new funds for growing businesses. Although Pisces has already officially launched, trading cannot begin until companies who will act as operators start their platforms, which are subject to licences. With more companies choosing to stay private for longer, the new trading system was created to give investors access to businesses they otherwise could not fund, and to allow those holding shares in private businesses the chance to cash out. That can be as a result of shares being given as part of an employment package, for example, or by being an investor in an earlier round of private fundraising — which isn't always accessible to private investors. Pisces is set up in the FCA's sandbox environment to allow for experimentation on what works, what is required and what best practice will turn out to be. The plan is for around a five-year developmental phase, during which time testing and adjusting will take place with the framework, ahead of permanent rules being established in 2030. While Pisces is the framework for the stock exchange itself, individual operators will operate the ability to trade — comparative to now, for example, in how people with an investing Isa on an app or with their bank go through them to buy or sell companies or funds listed on the LSE. Those operators will have flexibility on the type of private companies they list; the FCA expect some may operate by size or industry, or perhaps on timing of share sales. Shares may be available to buy quarterly or annually in different private companies, for example, or during set windows according to their need. While the new private stock market is largely welcomed, investors will need to be aware of the additional risks which may be involved, compared to putting money into listed companies. Legislation exists to demand retail investors have a certain amount of knowledge before parting with their money, but this includes being 'self-certified' according to investing experience. Additionally, while public stock markets are heavily regulated — one of the reasons companies stay private instead of floating — the idea for this sandbox platform is to stay similar to private market processes and laws. As a result, for example, the process known as insider trading will not apply in the same way, potentially leading to an imbalance of information between those privately investing and institutional, professional investors. Emma Reynolds, economic secretary to the Treasury, said: 'Pisces is a great example of industry, regulators and the government working together to go further and faster on innovative reforms to strengthen UK capital markets, supporting economic growth and putting more money in people's pocket as part of our Plan for Change. 'I welcome the FCA's announcement, which follows our legislation and opens Pisces to industry. This also builds on our announcements on a Stamp Taxes on Shares exemption for Pisces transactions, and on employees retaining the tax advantages on eligible shares traded.' Simon Walls, executive director of markets at the FCA, added: 'This bold design rebalances risk, but it is bold risk taking that made the UK the leading financial centre it is today. The new platforms will give investors greater access and confidence to invest in exciting new companies, while early backers and employees can sell up and invest again. 'Pisces is the latest step in the FCA's wide-ranging reforms to the UK's markets to boost growth and competitiveness.' Dan Coatsworth, investment analyst at AJ Bell, noted that in an ideal world, Pisces would operate as a first step toward broader aims for both businesses and stakeholders. 'Pisces could help private companies get used to the idea of slices of their business being owned by different people. It might act as a stepping stone towards a public stock listing, getting them used to regular financial reporting, transparency as a business, and understanding that a company is run for the best interests of shareholders, not the board of directors,' he said. 'It could also encourage their staff to develop a saving and investing habit. One of the biggest stumbling blocks for private company share ownership is that staff are often put off by the general inability to sell those shares at regular intervals. A lot of private companies won't offer the ability for staff to trade shares, meaning some people are stuck owning the equity until the business either lists on a public market or there is an internal event where they can sell down. 'In theory, Pisces could improve liquidity by allowing private company shares to be traded at more regular, albeit intermittent, intervals.' While there have been comments from some quarters that Pisces could effectively replace some markets such as the UK's AIM, Mr Coatsworth does not expect that will be the case - and will also not play an 'immediate role' in the government's plan to develop an investing culture in the country. Sign in to access your portfolio
Yahoo
2 days ago
- Business
- Yahoo
‘Lack of liquidity' the key factor in decline of the LSE
A lack of liquidity due to a relatively low appetite for investment in the UK is the main factor behind the decline of the London Stock Exchange (LSE), according to a commercial growth expert. Speaking on an episode of GlobalData's Instant Insights podcast, Carrie Osman, founder and CEO of growth consultancy Cruxy, suggested there are a range of factors behind companies choosing to list elsewhere or delisting, including some structural, but that, in her view, liquidity is the main issue. 'It doesn't have the liquidity, it doesn't have the buoyancy, and it doesn't, quite frankly, attract the most innovative technologies to list in London because of the fact that there doesn't seem to be the appetite from an investment pool to provide the liquidity that obviously some of these founders or private equity firms are looking for,' Osman said. 'Ultimately, you're looking for people to back your concept or idea, and you're looking for them to believe in that with their money to buy shares in your company and say, 'Yes, I believe that you're going to make me a lot of money. Let's go long here.' I was looking at some facts, and I thought it's very interesting that, for example, in the UK, about 23% of adults have stocks and shares. When we compare that to the US, it's 62%.' Osman was speaking following the announcement that Qualcomm has acquired UK-based semiconductor company Alphawave Semi, resulting in another high-profile departure from the LSE. She pointed to that deal as just one example of the challenges facing the LSE but noted that it wasn't just the UK exchange facing such issues. 'When you look at Europe as a whole, I think [there are] 183 European listings, and only about 15% of those are listed in their home turf,' she said. 'So, I think it probably is kind of far and wide when you look at Europe as a whole.' Osman believes the lesser culture for investing in the UK compared to the US – where individuals are exposed to investing through the 401(k) retirement savings plan – is limiting the potential of the LSE. 'How could you encourage people to kind of play an active role in the market?' she said. 'Maybe teach them about the market, teach them about stocks, teach them about trading. And then, of course, maybe there are ways that we could use tax incentives to encourage either companies or, of course, employees to be able to feel like they can invest in the markets without feeling like it's so much of a risk.' 'It always feels like it's less of a risk to just stick your money in an ISA and fingers crossed the Bank of England doesn't reduce the rate too much. That was how I was brought up. I think it would be amazing to think that there's a way to encourage more slight risk taking but with a bit of a support layer there so that people feel they can invest in our country and invest in some of our great assets.' Osman also pointed to the Private Intermittent Securities and Capital Exchange System (PISCES) as a means of encouraging investment. Per the UK's Financial Conduct Authority, 'PISCES is a new type of private stock market that will give investors more opportunities to buy stakes in growing companies.' 'If I own shares in a company, I can trade those shares without listing it publicly, so that there'll be these kind of trading windows,' Osman explained. 'So, I can trade those shares, and an asset manager can buy them all. But the thing that concerns me about that is that it's only secondaries, so it's only certain people they decide can do that, who are professional investors, whatever that means. 'And who decides the price? Is this just regulation? All the positive consequences, but it ends up with a lot of regulation on regulation, and it ends up with a lot of complexity? I'm worried that that could end up being a lot of positive intent, but maybe it doesn't lead to that outcome of driving liquidity that they would hope.' "'Lack of liquidity' the key factor in decline of the LSE" was originally created and published by Investment Monitor, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Yahoo
4 days ago
- Business
- Yahoo
What you need to know about UK's private stock market Pisces
The Financial Conduct Authority (FCA) confirmed on Tuesday in a joint statement with economic secretary to the Treasury, Emma Reynolds, that its Private Intermittent Securities and Capital Exchange System (Pisces) will launch later this year. Pisces is a new trading platform where shares in private companies can be traded. The FCA said will "open the door to more opportunities for investors, facilitating their access to growth companies." Private companies will be able tap into a broader range of investors and asset managers with exits offered for shareholders to sell up. Companies can set the floor and ceiling of share prices, and have a say over who can buy their shares. Simon Walls, executive director of markets at the FCA, said: "This bold design rebalances risk, but it is bold risk-taking that made the UK the leading financial centre it is today. The new platforms will give investors greater access and confidence to invest in exciting new companies, while early backers and employees can sell up and invest again." Read more: Pound dips following weak UK jobs report The government is currently looking to encourage more people to buy UK shares and attract more investment from overseas. Pisces is the latest step in the FCA's wide-ranging reforms to boost growth and competitiveness, and unlock capital investment and liquidity. It comes as a number of companies have recently moved their main listing to the US or been taken over. The platform could also act as a stepping stone for private companies towards an initial public offering (IPO). Dan Coatsworth, investment analyst at AJ Bell, said: "It might act as a stepping stone towards a public stock listing, getting them used to regular financial reporting, transparency as a business, and understanding that a company is run for the best interests of shareholders, not the board of directors." As companies choose to stay private for longer, there is demand for investors to trade private company shares easily and efficiently in an organised marketplace. Pisces meets this demand by allowing secondary trading of these shares. Emma Reynolds, economic secretary to the Treasury, said: "Pisces is a great example of industry, regulators and the government working together to go further and faster on innovative reforms to strengthen UK capital markets, supporting economic growth and putting more money in people's pockets as part of our Plan for Change. "I welcome the FCA's announcement, which follows our legislation and opens Pisces to industry. This also builds on our announcements on a stamp taxes on shares exemption for Pisces transactions, and on employees retaining the tax advantages on eligible shares traded." Read more: Stocks: Create your watchlist and portfolio Pisces will not be open to retail investors, unless they are employees of the company issuing the shares. Access will be limited to institutional investors, high-net-worth individuals, sophisticated investors and employees of participating companies. Investors will be provided with information about the risks involved to help them make informed decisions. Coatsworth added: 'It could also encourage their staff to develop a saving and investing habit. One of the biggest stumbling blocks for private company share ownership is that staff are often put off by the general inability to sell those shares at regular intervals. "A lot of private companies won't offer the ability for staff to trade shares, meaning some people are stuck owning the equity until the business either lists on a public market or there is an internal event where they can sell down." Read more: UK jobs data increase chances of more Bank of England interest rate cuts Pisces is not set to replace established stock markets like AIM as it will not support capital raising and it will not be open to the public — it is purely a secondary trading market with restrictions on who can buy and sell. Apart from employees of the private company, only institutional investors, high net worth individuals or those deemed to be "sophisticated" investors will be able to buy and sell via Pisces. Share buybacks will not be permitted, at least in the initial stages of the market's life. These factors mean the platform will not be a direct rival to the AIM market. AIM is already seen as a stepping stone for London's main stock market — and the government are hoping this journey can start earlier, with Pisces as a pathway for AIM. The proposal outlines plans to make Pisces share transactions exempt from stamp duty, and stamp duty reserve tax, which puts it in line with similar exemptions for AIM and the Aquis growth market. "Removing stamp duty on all UK shares would be a major step forward as the current rules make the UK less competitive than many other locations such as the US and some European markets. Stamp duty is a cost for investors and can add up for those who place a lot of trades," Coatsworth said. He added: 'Pisces is not going to change the world, but it should be a welcome addition to the UK's investment ecosystem.'Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Finextra
4 days ago
- Business
- Finextra
FCA rings bell on new private stock market Pisces
A new type of private stock market will be launched later in 2025 after the FCA announced the final rules for its Private Intermittent Securities and Capital Exchange System (PISCES). 0 PISCES is a new type of platform where shares in private companies can be traded. It will open the door to more opportunities for investors, facilitating their access to growth companies. Private companies can tap into a broader range of investors and asset managers and PISCES offers exits for shareholders to sell up. As companies choose to stay private for longer, there is demand for investors to trade private company shares easily and efficiently in an organised marketplace. PISCES meets this demand by allowing secondary trading of these shares. Companies can set the floor and ceiling of share prices, and have a say over who can buy their shares. Access to PISCES will be limited to institutional investors, high-net-worth individuals, sophisticated investors and employees of participating companies. Investors will be provided with information about the risks involved to help them make informed decisions. As set out in the FCA's letter to the PM outlining the regulator's approach to support growth, PISCES can unlock capital investment and liquidity. Simon Walls, executive director of markets at the FCA, said: 'This bold design rebalances risk, but it is bold risk-taking that made the UK the leading financial centre it is today. The new platforms will give investors greater access and confidence to invest in exciting new companies, while early backers and employees can sell up and invest again. 'PISCES is the latest step in the FCA's wide-ranging reforms to the UK's markets to boost growth and competitiveness.' Emma Reynolds, Economic Secretary to the Treasury, said: 'PISCES is a great example of industry, regulators and the government working together to go further and faster on innovative reforms to strengthen UK capital markets, supporting economic growth and putting more money in people's pockets as part of our Plan for Change. 'I welcome the FCA's announcement, which follows our legislation and opens PISCES to industry. This also builds on our announcements on a stamp taxes on shares exemption for PISCES transactions, and on employees retaining the tax advantages on eligible shares traded.'
Yahoo
4 days ago
- Business
- Yahoo
Britain's new private share platform to begin trading this year, regulator says
LONDON (Reuters) -Britain's new share trading platform for private companies is set for launch later this year, the financial watchdog said on Tuesday, after finalising rules for a market that regulators and the government hope will bolster the UK's capital markets. The Private Intermittent Securities and Capital Exchange System (PISCES) will enable trading of shares in private companies. The first shares should be traded on the platform later this year through a "sandbox," which is already open and allows regulators to test how it works before they finalise a permanent regime in 2030, the Financial Conduct Authority said. PISCES is designed to connect owners of fledgling unlisted companies who want to sell shares in their businesses with new investors keen to help those firms to grow and scale up. "The new platforms will give investors greater access and confidence to invest in exciting new companies, while early backers and employees can sell up and invest again," Simon Walls, the FCA's executive director of markets, said in a statement. Emma Reynolds, the government's economic secretary to the Treasury, welcomed the announcement and said PISCES would boost UK capital markets and support economic growth. Companies wishing to run a PISCES platform will have to apply to the FCA. Once approved they will be able to run intermittent trading events, at which company owners can offer stock for sale at regular intervals, at prices they set, to new shareholders. PISCES could help small companies with limited experience of capital markets get on the radar of cash-rich and supportive investors, without undertaking a full-scale initial public offering. The concept of PISCES has proven a tough sell in some quarters of the UK industry, with bankers telling Reuters earlier this year that they fear hits to revenues and ultimately being bypassed in a booming market for private capital.
