The UK government is set to launch the Private Intermittent Securities & Capital Exchange Systems (PISCES) platform this spring, enabling trading of shares by investors and employees without requiring a full public listing.
PISCES could significantly improve liquidity and investment opportunities for private companies and employees, but there are tax complexities and uncertainties that need to be clarified. Particularly for those that have, or plan to have, an EMI or CSOP scheme.
PROS:
✅ Easier share liquidity – employees and investors in private companies can sell shares more easily without requiring a full stock market listing.
✅ Improved access to capital – private companies can attract more investors since shares will be intermittently tradeable.
✅ Option holders benefit – EMI and CSOP participants can sell shares through PISCES, potentially unlocking value more conveniently.
✅ Potential tax advantages – the government is considering stamp duty exemptions for PISCES-traded shares, reducing transaction costs.
✅ Retains EMI and CSOP tax benefits – the fundamental tax advantages of these share schemes remain unchanged.
CONS:
❌ Not applicable to existing EMI/CSOP schemes – companies cannot modify existing EMI or CSOP options to allow PISCES trading without negative tax consequences.
❌ Tax burden on option exercise – shares acquired through PISCES are treated as Readily Convertible Assets (RCAs), meaning PAYE and NICs are immediately due, which could reduce net gains.
❌ Uncertainty around rules – the government is still reviewing key aspects, such as whether all stamp duties will be waived.
❌ Potentially limited trading windows – unlike public markets, PISCES only allows intermittent trading, meaning liquidity might not always be available when needed.
Check out Postlethewaite’s, the employee ownership and share option specialists, more detailed blog on this update here.
