How public markets evolved, and what it means for PISCES

Private markets are at an inflection point. Secondary transaction volumes hit $240 billion globally in 2025, up 48% on the year before.

Companies are staying private for longer than ever, with the median age at IPO reaching 14 years in 2024, compared to just four years during the dot-com era.

With more employees than ever holding equity through share schemes like EMI, the pool of people with illiquid stakes in private companies has never been larger.

The UK Treasury’s response is PISCES, the Private Intermittent Securities and Capital Exchange System, a regulated framework for private company share trading that sits deliberately between informal secondaries and a full public listing.

To understand where PISCES is likely to go, it helps to look at where markets like it have been before.

How the public markets began

The London Stock Exchange (LSE) emerged because something that was already happening - brokers trading shares at Jonathan’s Coffee House in the 1690s - had grown to the point where informal arrangements were no longer sufficient.

Those early trades were unregulated, opaque, and prone to manipulation. However, they served a real purpose, by connecting people who had capital with businesses that needed it.

As volumes grew, so did the need for structure. The exchange formalised in 1801, more than a century after the coffee house share trading began. Rules were established, membership was defined, and what had been a chaotic informal market became a functioning institution.

Across the Atlantic, a similar story unfolded. The New York Stock Exchange traces its roots to 1792, when 24 brokers signed the Buttonwood Agreement under a tree on Wall Street, an informal arrangement that gradually formalised into the world's largest stock exchange.

Nasdaq followed much later, launching in 1971 as the world’s first electronic stock market, explicitly designed to modernise trading and reduce the friction of floor-based exchange. Each of these institutions began as a response to a gap - a need for structured, trusted infrastructure that informal markets couldn’t adequately provide.

The lesson from all three is consistent. Informal markets formalise as volumes grow. Structure follows demand. Once a regulated framework exists, participation broadens considerably beyond the original participants.

Why AIM was created

By the early 1990s, the LSE’s main market was well established but increasingly inaccessible to smaller, growing companies. The compliance burden, listing costs, and ongoing regulatory requirements made a full listing impractical for businesses that were ambitious but not yet at scale.

AIM, the Alternative Investment Market, launched in June 1995 to fill that gap. It was deliberately designed as a lighter-touch market: less prescriptive regulation, lower costs, more flexibility over governance, and no minimum market capitalisation requirement.

The idea was to create a stepping stone, a place where growing companies could access public capital and provide liquidity for shareholders, without taking on the full obligations of a main market listing.

The early scepticism was significant. Critics questioned whether a lighter-touch market would attract serious investors or credible companies, but the answer came quickly.

AIM launched with just 10 companies and a combined market capitalisation of £82 million.

Within a decade, it had become one of the most active growth markets in the world. Since its launch, over 4,000 companies have listed on AIM, collectively raising more than £135 billion.

Crucially, many AIM companies never graduated to the main market. They didn’t need to, as AIM became a destination in its own right, not a stepping stone.

The lighter regulatory calibration was a key strength. It created a market that was genuinely suited to a different kind of company, at a different stage of growth, with different needs.

That distinction matters enormously for understanding PISCES.

Why PISCES was inevitable

PISCES is not trying to replicate the main market, or even AIM. It is creating a regulated venue for companies that are not yet ready for any form of public listing, and may never want one.

The mechanics reflect that positioning. Trading happens in scheduled windows rather than continuously.

Only existing shares change hands. The company raises no new capital and existing shareholders face no dilution — liquidity without any change to the ownership structure.

Disclosure is standardised but kept private, shared only with participants in each event rather than published publicly. Companies retain control over who can buy their shares, at what price, and when events take place. Stamp duty is waived entirely.

As Economic Secretary to the Treasury Tulip Siddiq put it when the framework was announced:

“PISCES will be an innovative new type of stock market for trading private company shares and is a significant step forward in our reforms to capital markets.”

The FCA’s framework creates the regulatory certainty that institutional investors need to participate with confidence, and that companies need to treat structured liquidity events as a planned part of their long-term equity strategy rather than a one-off transaction.

That shift in thinking, from liquidity as an exceptional event to liquidity as a planned feature, is exactly what AIM enabled for growing companies in the mid-1990s.

PISCES is designed to do the same for private companies today.

The market context that makes PISCES timely

The conditions that created demand for PISCES have been building for years.

Companies are staying private far longer than they used to, accessing large pools of private capital while avoiding the regulatory burden and loss of control that comes with a listing.

That decision creates a growing problem for shareholders. Founders, early employees, and seed investors can find themselves holding significant paper value for a decade or more, with no obvious route to realising it.

Share schemes, now a standard feature of startup compensation, with EMI adoption growing steadily, have widened the pool of people affected.

The value of these options is contingent on a liquidity event that could be years away, or may never come in the expected form.

Secondary markets have grown to fill that gap. Global volume grew from $162 billion in 2024 to $240 billion in 2025, with transaction volumes growing at close to 60% year on year.

The majority of private tech companies are now planning to run a secondary event within the next year.

What was once a niche corner of private finance is rapidly becoming a mainstream tool for managing shareholder expectations.

PISCES arrives at exactly the right moment in that trajectory, the point at which informal secondary activity has grown large enough to need, and support, a formal market structure.

Just as Jonathan’s Coffee House gave way to the LSE, and growth company financing gave rise to AIM, the explosion in private secondary transactions has created the conditions for PISCES.

Where PISCES goes from here

The framework is already moving faster than many anticipated. The FCA published final rules in June 2025. The London Stock Exchange became the first approved PISCES operator shortly after, branding its platform the Private Securities Market. JP Jenkins received approval later in 2025.

The sandbox runs until June 2030, at which point the Treasury will assess whether to make PISCES permanent legislation.

That five-year window is both a testing period and an opportunity for operators to establish the market, for companies to build familiarity with it, and for the ecosystem of advisors, brokers, and platforms to develop around it, much as it did around AIM in the late 1990s.

The AIM parallel also suggests that early scepticism about PISCES about whether it will attract serious companies, whether trading events will be well-subscribed, and whether pricing will be credible, is likely to fade as the model proves itself.

AIM faced identical questions in 1995. The answer came through participation, not persuasion.

For share scheme holders specifically, the picture has become materially more attractive. The UK government confirmed in 2025 that existing EMI and CSOP options can be amended to include PISCES trading events as exercisable events without losing tax-advantaged status, which is a significant development.

It means employees holding vested EMI options now have a structured, tax-efficient route to partial liquidity without waiting for an acquisition or IPO.

The direction of travel, based on every historical precedent from the LSE to AIM, points towards gradual broadening of participation over time.

If AIM is any guide, PISCES may well follow the same arc, starting with institutions and sophisticated investors, then gradually opening up until structured private liquidity becomes as unremarkable as a stock market listing once seemed.

What companies should be doing now

Public market history suggests that the participants who capture the most value from new trading infrastructure are not the largest or best-funded, but the ones who understood what was coming and prepared accordingly.

The companies that are best placed to take advantage of PISCES are those already in excellent shape: clean, accurate cap tables with every shareholder clearly recorded, clear shareholder history, properly executed share certificates, and share schemes structured with future liquidity in mind.

For EMI and CSOP schemes in particular, PISCES trading windows may need to be built into option agreements from the outset. Valuations also need careful management, given that PISCES trades may be used by HMRC as evidence of market value going forward.

The framework is new but the underlying dynamic of shareholders in growing private companies needing structured routes to liquidity is not.

The question for founders and management teams is simply whether they will be ready when the window opens.

Vestd helps companies build and manage share schemes that are ready for whatever comes next, including PISCES. Book a call with our team to find out more.