The first company to be listed on the new PISCES market for private companies has been announced as QPlay, a board game maker. JP Jenkins pipped the London Stock Exchange (LSE) to list the first company under the new scheme aimed at boosting the UK's capital markets.
The Private Intermittent Securities and Capital Exchange (PISCES) regime is a newly approved market for private companies to periodically trade shares like a public stock exchange. The objective of the new system is to give new investors easier access to growth companies pre-IPO and allow early-stage investors and other shareholders, including employees, to realise their investments.
JP Jenkins is a British company that has long facilitated the trading of shares in unlisted companies through its regulated platform and attained its approved status for PISCES three months after the LSE.
The LSE had announced that shares in Oxford Science Enterprises, an early-stage Venture Capital fund best known for investing in quantum computing firm Oxford Ionics, would be the first to trade on its Private Securities Market (PSM), but the Financial Times has announced that it was pipped by QPlay. QPlay has more than five million players online and is the maker of Outsmarted, which it says is the UK’s best-selling board game, with more than one million copies sold.
Why companies should be aware
Joining the PISCES system comes with enhanced governance requirements and may mean updating a business's Articles of Association and being aware of changes in tax circumstances for both employees and the company.
- Under the Employment-Related Securities (ERS) regime, if, at the time of an acquisition of shares by an employee, arrangements exist for the shares to be traded on a PISCES platform, they will be viewed as Readily Convertible Assets (RCAs).
- Provided that Enterprise Management Incentive (EMI) options are granted for commercial purposes to recruit and retain employees, it will be acceptable for a PISCES trading event to be a specified event to allow employees to exercise their options.
- Company Share Option Plans (CSOPs) are subject to the requirement to hold options for three years from grant, but a PISCES trading event can be a specified event to allow employees to exercise their options.
- Existing option agreements can be amended to include a sale on a PISCES platform as a specified exercise event.
- Share buybacks, these will not be permitted at the outset because of the associated complexity.
A PISCES platform, which requires FCA permission, can only operate as a secondary market for the trading of existing shares and not a way to raise capital through the issue of new shares (though participating companies may be more attractive to primary investors as a result of greater liquidity).
Useful guides on this topic
Private Intermittent Securities and Capital Exchange System (PISCES)
What is the Private Intermittent Securities and Capital Exchange System (PISCES)? What are the tax implications of trading shares on PISCES? What impact will there be for share schemes?
EMI: Enterprise Management Incentive Scheme
What is the Enterprise Management Incentive (EMI) scheme? What's the difference between EMI and an unapproved share scheme?
Employee Shares: the Employment-Related Securities rules
What are the tax consequences when a company gives shares to an employee or director? What are employment-related securities? What is best: shares or share options? How do you set up a share scheme?
How to start a company
How do you go about creating a company? What do you need to do start a company? A practical guide on how to form (incorporate) a private limited company covering the key points that you need to consider.
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