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PISCES: Summary of Key Investment Risks

A high‑level overview of the risks associated with participating in this trading platform.

Estimated reading time: 2 min

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.
 
 

What are the key risks?


1. You could lose all the money you invest

  • If the business you invest in fails, you are likely to lose 100% of the money you invested. Most start-up businesses fail within five years.


2. You are unlikely to be protected if something goes wrong

  • Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker here. [https://www.fscs.org.uk/check/investmentprotection-checker/]
  • Protection from the Financial Ombudsman Service (the Ombudsman) does not cover poor investment performance. If you have a complaint against an FCA-regulated firm, the Ombudsman may be able to consider it. Learn more about protection from the Ombudsman here. [https://www.financialombudsman.org.uk/consumers]


3. It may be difficult to sell your shares in future

  • You may not be able to sell your shares via this platform in future if the company in which you invested decides not to provide a future trading window.
  • This platform provides intermittent trading events of limited duration. Once this trading window ends, you will not be able to buy or sell shares on this platform until the next trading event (if any).
  • This is also not a permanent trading platform. It will be for the government to decide whether to make this type of platform permanent. You will not be able to sell your shares via this platform if the platform comes to an end. 
  • This type of platform has not been tested before so there may be risks we have not anticipated. This is not a complete list of all the risks you may be exposed to. 
  • Buying shares through this temporary trading platform is riskier than buying publicly listed shares that are traded on an exchange.

For more information about the risks of trading via this platform, please read this further risk warning here.


4. You won’t get your money back quickly and may not get your money back at all

  • Even if the business you invest in is successful, it may take several years to get your money back. You are unlikely to be able to sell your investment early and you should not expect to get your money back through dividends. 
  • If you are unable to sell your shares through this platform, you will have to find another way to sell your shares, including by finding a buyer yourself. You may not be able to sell your shares.
  • You might also have an opportunity to get your money back if the business is bought by another business or the company’s shares are made available for regular trading on an exchange. This is not common.


5. Don’t put all your eggs in one basket

  • Putting all your money into a single business or type of investment is risky. Spreading your money across different investments makes you less dependent on any one to do well.
  • A good rule of thumb is not to invest more than 10% of your money in high-risk investments. [https://www.fca.org.uk/investsmart/5-questions-ask-you-invest]


6. The value of your investment can be reduced and it may be worth nothing if the business fails

  • The percentage of the business that you own will decrease if the business issues more shares. This could mean that the value of your investment reduces, depending on how much the business grows. For example, most start-up and some younger businesses issue multiple rounds of shares. 
  • These new shares could have additional rights that your shares don’t have, such as the right to receive a fixed dividend, which could further reduce your chances of getting a return on your investment.
If you are interested in learning more about how to protect yourself, visit the FCA’s website here. [https://www.fca.org.uk/investsmart]
 


7. Market risk warning 

Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you are unlikely to be protected if something goes wrong. 

Before investing, you should also be aware of the specific risks of a PISCES market outlined below.

PISCES is a market for the trading of private company shares. Investing in private companies may involve extra risks compared to trading in public companies. For instance, private companies may be at an earlier stage of development or have fewer shares in public hands available for trading.

PISCES trading events may be infrequent and are not guaranteed to repeat. This may make it more difficult for you to sell your shares. PISCES operators are subject to obligations that may require them to suspend or cancel trading events, to protect the orderliness of their platform.

PISCES platforms also operate within a temporary sandbox that is due to expire in 2030, rather than a permanent regulatory regime. This means that there may be risks of trading on PISCES that we have not anticipated. It will be for the government to decide whether to make the PISCES regime permanent. You will not be able to sell your shares via this platform if the PISCES regime comes to an end.

PISCES company disclosures are not required to be approved by a PISCES operator or the FCA. You could reduce your risk of trading on PISCES by performing your own checks on PISCES company disclosures.

Company disclosures are subject to a specific statutory liability regime which may affect your ability to claim damages for losses caused by incorrect or misleading statements within them. Information not identified as core disclosure information would be subject to a higher liability threshold. Seek advice as appropriate.

The UK Market Abuse Regulation does not directly apply to shares traded on a PISCES platform.

As a result, other investors may possess information relevant to an assessment of the price of PISCES shares that has not been disclosed on PISCES. This means that some investors may have more information than others.

PISCES companies may set a minimum and/or maximum price for their shares on PISCES (a ‘price parameter’). Companies will need to explain how they have determined these values and you should consider whether you think their price parameters are reasonable before trading their shares.