The Financial Conduct Authority has today published its proposals for a new investment-generating stock market platform to be called PISCES.

PISCES (The Private Intermittent Securities and Capital Exchange System) will enable more small investors to take stakes in private companies, the watchdog says.

The market will enable shares in private companies to be bought and sold more easily. 

The FCA says that greater confidence to invest in these companies seeking capital will lead to more funding to help them to “grow and scale up.”  

The FCA believes that more companies are choosing to stay private for longer and there is increasing demand for investors to be able to trade shares in these private companies more easily.

It calls the move a “a world-leading innovation in private markets” and says the market could provide opportunities for more diversified returns for investors.  

Because the investments come with significant risk, the FCA will consult in particularly on risk warnings for investors to help them make informed decisions.  

The FCA is planning to:

• reform the prospectus regime, to make it cheaper and easier for companies to raise money in the UK  

• give asset managers greater freedom in how they pay for investment research   

• open the Digital Securities Sandbox which allows firms to test innovative new technologies for trading and settling assets  

• Set out a roadmap to regulating crypto. 

Simon Walls, interim executive director of markets at the FCA, said: “Next year we will ring the bell on a new private stock market that could transform how private companies access funds and grow. It will offer investors more access and a greater confidence to invest in private companies and could act as a stepping stone to public markets for those firms. 

“We want to work with industry and ensure we have the right building blocks in place to support investment in growing companies.” 

Tulip Siddiq, economic secretary to the Treasury, said: “PISCES will be an innovative new type of stock market for trading for private company shares and is a significant step forward in our reforms to capital markets. It will give investors the chance to get in on the ground floor of some of the most exciting companies and support the growth of those businesses.”

Dan Coatsworth, investment analyst at AJ Bell, said: “The proposed new stock market called ‘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 full IPO and fits well into broader plans to make the UK a more attractive place for companies to list their shares."