LSE launches the Private Securities Market, the UK’s first Private Intermittent Securities and Capital Exchange System (“PISCES”) platform

The London Stock Exchange (“LSE”) has now launched the UK’s first PISCES trading platform, the Private Securities Market (“PSM”). This launch coincides with PSM’s opening auction by ‘Tradable Private Equity’, which on 25 March 2026 will trade shares in the holding company of ‘Oxford Science Enterprises’, a technology, AI and life sciences investor that is valued at £1.3 billion ($1.7 billion). 

What is PSM?

PSM is the LSE’s new, FCA approved platform for trading shares in private companies, operating under the PISCES (Private Intermittent Securities and Capital Exchange System) framework.

Key Highlights:

• Open to UK and overseas companies not listed on any exchange.
• Not subject to the UK Market Abuse Regulation/Insider Dealing Regime nor any transactional reporting requirements or PSM-specific oversight.
• Investor access restricted to institutional, professional, sophisticated, high-net-worth investors, and company employees.
• Periodic auction trading (monthly, quarterly, annually, or ad hoc), as determined by the company, rather than continuous public trading.
• Only initial ‘Core Information’ disclosure requirements, as permitted by the company.
• Companies determine what share classes may be traded, who is permitted to buy, and price and volume parameters.

Which companies are eligible for PSM?

PSM may be used by both UK and overseas private companies, provided they are not listed on any domestic or overseas trading exchange. 

Beyond this limitation, the applicant company must satisfy the below requirements (unless waived/substituted by the LSE*):

• Eligible Company Requirement – the applicant company must show at least two of the following:

  • £10 million (or equivalent) raised by debt or equity in the 3 years prior to joining PSM, such fundraising having had material participation from independent, experienced investors;
  • Total assets of at least £20 million (or equivalent), from the company’s latest audited financial statements; and/or
  • Annual turnover of at least £10 million (or equivalent), based on its latest audited financial statements.

   

  *the LSE, in its absolute discretion, may substitute the eligible company requirement for a lower standard. In doing this, the LSE will take into account (i) the past fundraising activity, (ii) duration of operation, (iii) independent valuation, and (iv) employee headcount of the applicant company.

• Compliant Directorship Requirement – the applicant company must:
  • Have a minimum of 2 formally appointed directors; and
  • Possess appropriate financial accounting and reporting expertise among the board of directors/senior management, as suitable for the applicant company’s size, nature of business and risk profile.

Why should companies use PSM?

PSM gives participating companies significant control over the type, volume, pricing, and investor access for their auctioned shares. Companies decide which investors can join auctions and view disclosures; there are no ongoing disclosure obligations, and disclosures are not subject to the UK Market Abuse Regulation/Insider Dealing Regime. 

PSM is attractive to: 

• Growth-stage companies striving to broaden investor access and obtain greater shareholder liquidity;
• Mid-stage companies aiming to simplify complex ownership structures, diversify shareholder positions and facilitate later funding rounds; and
• Mature companies seeking to access liquidity, test IPO readiness, assess market value and provide a liquidity event to shareholding venture funds.

PSM is open to non-UK companies and will offer new financial and strategic opportunities for such companies seeking access to UK capital markets, for a wider investor pool, greater liquidity, extended trading hours and a potential pathway to a UK public listing in the future, through institutional investor engagement and developing a track record pre-IPO. Similar advantages were cited in the dual UK-US listing of the AI data centre company ‘Fermi Inc’, in October 2025; Fermi raised over $680 million (giving it a valuation of close to $12.5 billion), with Fermi’s CEO remarking that a UK listing adds transparency, bolsters supply chain connections and provides greater access to overseas investors. Moreover, PSM’s first auction will involve an innovative company structure, known as a Tradable Private Equity Investment Company (“TPEIC”). TPEIC's are facilitated by and specifically designed to operate on PSM, and will trade their shares while holding a valuable subsidiary or other asset, providing significant secondary liquidity options for UK and international investors.

Which investors can use PSM?

Given its reduced disclosure requirements, ‘institutional’, ‘professional’, ‘sophisticated’ and ‘high-net worth’ investors, as well as employees, directors and service providers of the participating companies, are permitted to invest in PSM traded companies (investors must be certified as eligible). 

An intermediary broker, known as a Registered Auction Agent (“RAA”), will be required to verify and confirm the designation/employment status of a PSM investor, though investors may also self-certify. To participate in PSM, an investor must sign up with one or more RAAs, who will also perform KYC/AML checks and present all required risk warnings. 

On 2 October 2025, Europe’s largest equity crowdfunding platform, Crowdcube, partnered with the LSE to become an RAA, a move which will allow Crowdcube’s investors to invest in PSM participating companies and provide additional liquidity on the platform. 

How does PSM function?

The trading auctions for PSM securities will be determined by a participating company, provided such auctions are “occasional” (PSM auctions are expected to be held monthly, quarterly, annually or on an ad hoc basis). Auctions are limited to a day, with a minimum 10 business day preparation period, subject to extension by the participating company. Between auctions, a participating company will continue to trade as a private company, with no reporting requirements owed to PSM. 

Companies may set price and volume parameters, including maximum and minimum prices, to ensure pricing stability. The basis for pricing must be disclosed, with the LSE recommending standard valuation methods like the IPEV Guidelines (independent valuation is optional but must be disclosed if used). Furthermore, PSM allows companies to choose between ‘Open Auctions’ (accessible to all eligible investors) and ‘Permissioned Auctions’ (investors must apply and be approved). The company, via its RAA, controls investor eligibility and can veto applications.

PSM disclosure requirements are significantly reduced compared to other LSE markets. Participating companies will need to provide a ‘Core Disclosure’ packet, which will cover the company’s business, management, financials, share capital, ownership rights, employee share schemes, directors’ transactions, material contracts, risk factors, share capital raises (past 3 years), major shareholders (>25%), related party transactions, and details of previous and upcoming PSM trading events. 

Except for directors’ transactions and major shareholders, companies may omit disclosures for legitimate reasons, such as lack of access, protection of interests, contractual restrictions, irrelevance, or risk of violence/intimidation. Any exemption must be specified and explained.

How does a company prepare to auction on PSM?

Companies that are considering using PSM are advised to check their constitutional documents, along with any investment or shareholders’ agreements, and consider whether any amendments and/or shareholder or investor approval is required for trading on PSM. It is anticipated that amends to constitutional documents will be required, especially if VC investors are present, to permit the transfer of shares.

Companies should also contemplate the nature of any shares to be traded. PSM allows multiple share classes and lines of shares to be traded. Once the shares have been chosen to be traded at auction, a company must ensure these shares are dematerialised into CREST through an RAA broker. 

What are the costs of PSM?

Companies

PSM will charge both annual and per-auction fees for participating companies:

• An annual fee of £25,000, payable upon initial onboarding and subsequently each following January (this pro-ratable annual fee includes the setup of two auctions, per calendar year); and
• A per-auction charge of £15,000 (an invoice for the auction fee will be raised when the auction is scheduled).

RAAs

In addition to membership fees, RAAs will be charged trading transaction fees based on the transaction values executed during an auction. These fees differ depending on whether the RAA is buy-side or sell-side:

• For sell-side RAAs, the transaction fees are 1.00% of the value of the transaction (sell-side RAAs will be exempt from trading transaction fees until 30 June 2026); and
• For buy-side RAAs, the trading transaction fees are 0.75% of the value executed in an auction (buy-side RAAs will be exempt from trading transaction fees until 1 July 2027).

These fees are payable by the RAAs to the LSE, and will likely be passed on to transacting shareholders.

Tax

PSM auctions will be exempt from stamp duty and stamp duty reserve tax. 

Moreover, Enterprise Management Incentive options (“EMIs”) may be granted on terms that allow their exercise during a PSM auction. It is important to note that any amendment of an existing EMI, to allow it to be exercisable during a PSM auction, will be regarded as a release and regrant of the EMI.

Company Share Option Plans (“CSOPs”) will also be exercisable by employees during a PSM auction, provided this is stated in the terms of the CSOP, and that the CSOP is exercised at least three years from its grant. As with EMIs, amendment of existing CSOPs will be regarded as a release and regrant.

EMIs and CSOPs will not lose their tax advantages due to any PSM-related amendment, provided they are granted before the (upcoming) Royal Assent of the Finance Bill 2025 – 2026, and are varied on or after 15 May 2025 for the exclusive purpose of being exercisable in relation to a PSM auction that they are then immediately sold in.

Comparison with Nasdaq Private Market

In comparison to the Nasdaq Private Market (“NPM”), PSM provides a more flexible and company-friendly framework for secondary share transactions. For example, companies participating on PSM benefit from a minimum auction window of 11 business days, in contrast to NPM’s minimum of 20 business days. PSM auction windows are also highly extendable, while NPM’s are more rigid. 

PSM also offers greater scope for investor control, with private auctions where prospective buyers may be individually vetted and vetoed by the company. NPM allows for investor eligibility criteria to be set, but provides companies with far less granular control, and instead aims to maximise secondary market liquidity. Of course, PSM also allows for maximised liquidity in the form of open market auctions. 

Furthermore, companies on PSM have a significant degree of control over the trading of their shares, whereas NPM relies on structured liquidity programs such as tender offers and low-parameter auctions, where pricing and transaction volume are broadly not within the control of the company. In contrast, PSM enables companies to control timing, volume, and pricing bands while leveraging LSE’s proven settlement infrastructure for efficient and algorithmic execution.

Due to its flexibility, PSM is able to mirror the advantages provided by NPM, while providing for greater company control.  

CONTACT
Please contact Lena Hodge or Nick Davies with any queries regarding this Client Alert.