In next week’s budget, British finance minister Jeremy Hunt is anticipated to introduce plans for a system allowing private companies in the UK to trade their shares on exchanges, reports the Financial Times, citing an official source.
This initiative, dubbed the Private Intermittent Securities and Capital Exchange System (Pisces), is designed to offer investors the opportunity to sell portions of their stakes in private firms on specified days throughout the year, providing some liquidity in the shares of these companies without the regulatory complexities associated with public listings.
The proposed system would serve as a bridge between public and private markets, allowing for the trading of shares in private companies while avoiding the stringent regulations imposed on publicly listed firms.
However, companies utilizing Pisces would not be permitted to raise new capital through this platform, and retail investors are unlikely to have access to it.
Instead, institutional investors and employees who own shares in the companies they work for may participate in trading through Pisces, subject to the agreement of the respective companies.
The UK Treasury’s move reflects a broader strategy aimed at supporting the growth of unlisted companies with the expectation that they will eventually transition to public listings, thereby strengthening the UK capital market.
This initiative comes at a crucial time as London seeks to maintain its competitiveness in the global financial landscape following Brexit, amidst competition from financial hubs like New York and the European Union.
The proposal is expected to kick off with a consultation on regulatory frameworks for the initiative, emphasizing the government’s commitment to fostering an environment conducive to the growth and development of private businesses in the UK.
However, details regarding the implementation and operational aspects of Pisces are yet to be fully disclosed, pending further announcements from the UK Treasury.
