FCA Begins Consultations on New Private Stock Market PISCES
The FCA has proposed new rules and regulations for a private stock market PISCES.
About the Announcement
The Financial Conduct Authority (FCA) released a consultation paper today. The United Kingdom’s financial regulator is seeking comments and feedback on their proposed rules and regulations to govern a new private stock market. The name of the new platform will be The Private Intermittent Securities and Capital Exchange System or PISCES.
The shares of privately held companies will be bought and sold through the stock exchange. The FCA has stated that this novel stock exchange will help investors to gain stakes in privately-held companies which may have been inaccessible before. It will also help private companies raise capital for their operations and expansion.
The decision to launch such a platform has been made keeping in mind that companies are staying private for longer than before. Sakeholders in such companies need to be able to trade their shares in a smoother manner.
Press Statements
Simon Walls who is the interim executive director of markets at the FCA has 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.”
Further, Tulip Siddiq, who is the Economic Secretary to the Treasury has stated,
“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.
Today’s consultation marks a significant step towards delivery of the new market next year and sits alongside our wider programme of reforms to boost competitiveness and investment. That includes the FCA’s overhaul of the UK listing rules and the creation of pension megafunds which will unlock billions of pounds of potential investment in businesses.”
Impact on Investors
The proposed changes to the financial system in the United Kingdom may have widespread consequences. It will allow investors with higher risk-taking ability to participate earlier in promising companies. It will also allow promoters and stakeholders in private companies to be able to liquidate their holdings in a smoother manner.
Summing Up
Overall, the FCA’s announcement may act as a watershed moment not just for the UK but for the world. Until now, no financial regulator has allowed private companies to sell their shares to the public. If the new private stock exchange is successful, it may open several new doors.
