The U.K.'s financial watchdog wants industry input on its new platform for trading shares in private companies, a move to allow investors to take stakes in unlisted companies.
The Financial Conduct Authority set out its proposals for the Private Intermittent Securities and Capital Exchange System, known as PISCES, with the aim of bringing more funding into these private companies and helping them grow, the FCA said in a statement.
The regulator published a consultation paper focusing on the risk warnings associated with such investments, to help investors to make informed decisions.
“Next year we will ring the bell on a new private stock market that could transform how private companies access funds and grow,” said Simon Walls, interim executive director of markets at the FCA, in the statement. “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.”
The proposed regulatory framework will be established under a financial market infrastructure sandbox created by His Majesty’s Treasury. A sandbox allows for the testing of new ideas in a live setting, so PISCES can be tested and improved before becoming permanent. The PISCES sandbox will operate for five years, the consultation paper said.
The deadline for comments is Feb. 17. The FCA expects to publish its final rules for the PISCES sandbox after the Treasury presents the rules to Parliament in May.
The move forms part of the U.K.’s financial markets reforms to boost competitiveness and investment in the country. The FCA has already overhauled U.K. listing rules, while the new Labour government had also kicked off retirement reforms, including the creation of so-called megafunds. The government published the first part of the two-stage review in November. However, on Dec. 16, media reports said the government was delaying the second part of the review, which was due to consider the adequacy of retirement savings.
