The Financial Conduct Authority (FCA) has laid out plans for a new platform to facilitate the trading of shares in private businesses.
If you are investment planning in Cheshire, the Private Intermittent Securities and Capital Exchange System (PISCES) has been devised by the regulator as a means of strengthening Britain’s capital markets. The FCA hopes PISCES will match unlisted company owners who are selling equity with investors interested in growing and scaling their business. Legislation on the legal framework for PISCES is set to go through Parliament.
The platform is being developed using a ‘financial markets infrastructure sandbox’, which will enable the FCA to test the design and iron out any issues highlighted by users before finalising its permanent rules.
How will it work in practice? Private company equity owners keen to sell stock can use the PISCES platform to set up an auction. As a shop window and marketplace, it is hoped it will entice investors eager to join forces with promising start-ups. Company owners, moreover, will be able to screen or vet prospective investors. Any company looking to use a PISCES platform will need to first apply to the FCA for approval. Once granted, you will be able to set dates for occasional trading events, where company owners get to offer stock to new shareholders.
What are the advantages? PISCES is being touted as a solution to help small companies with limited experience of capital markets get greater visibility amongst wealthy and committed investors, while avoiding a full-scale public offering (IPO), which requires greater regulation.
