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Staff Guidance Note: Treatment under the Revised Ethical Standard 2024 (the Ethical Standard) of companies traded on PISCES and other exchanges
The FRC does not accept any liability to any party for any loss, damage or costs howsoever arising, whether directly or indirectly, whether in contract, tort or otherwise from any action or decision taken (or not taken) as a result of any person relying on or otherwise using this document or arising from any omission from it.
© The Financial Reporting Council Limited 2026
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Introduction
1Private Intermittent Securities and Capital Exchange System (PISCES) is a type of trading platform, launched in 2025. It allows investors that are professional, of high net worth (HNW) or sophisticated, and individuals connected with a company, to trade in that company's shares at intermittent trading events. PISCES is currently regulated through a Financial Conduct Authority (FCA) sandbox.
2Under the Ethical Standard, additional requirements apply to audits of entities classified as "listed” compared with those that apply to audits of entities that are not. This is consistent with the Code of Ethics issued by the International Ethics Standards Board for Accountants. Companies traded on PISCES have characteristics in common with those traded on Regulated Markets and Multilateral Trading Facilities (MTFs), which are treated as listed for the purposes of the Ethical Standard. However, they also have characteristics in common with unlisted companies. This raises the issue of whether or not entities traded on PISCES should be categorised as listed under the Ethical Standard.
3The FRC has determined that companies traded on PISCES should not currently be categorised as listed entities for the purposes of applying the Ethical Standard. The purpose of this Staff Guidance Note (SGN) is to set out the principles underlying that view, which may also be applied to other new exchanges that may be formed.
4Should circumstances cause the FRC to change that view, the FRC will provide notice, via a revised SGN, of not less than one year.
Features of PISCES
5Key features of PISCES are:
- It cannot be used for primary issues; rather, its aim is to create a secondary market for shares in mature private companies with significant employee or early investor shareholdings.
- There are various PISCES platforms, each operated by an FCA-approved operator. Each operator can set rules of its own, subject to enforcing rules imposed by the FCA.
- The operators hold intermittent trading events, at the request of companies using their platforms, at which shares can be bought and sold. Initially only equity shares will be traded on PISCES.
- Who can trade in PISCES shares is restricted in legislation to:
- Professional investors
- High net worth (HNW) or sophisticated investors
- Individuals that qualify on the grounds of being employed by or providing services to the PISCES company
6Key differentiators between PISCES companies and those traded on Regulated Markets or MTFs are as follows:
- Access to PISCES is restricted. It is a private exchange system, rather than one in which the public can trade.
- Retail customers that are not connected with a company cannot invest in it on PISCES unless they have high net worth or are sophisticated.
- PISCES is for secondary trading only and admission is not required.
- Although PISCES operators must be FCA-authorised, the governance of PISCES markets is contractual between participants and the operator, rather than being determined by statute or regulation.
- FCA regulation of PISCES is lesser than for Regulated Markets or MTFs. Companies that are traded on PISCES are not subject to Market Abuse Regulation (MAR) and PISCES markets are only subject to limited MAR (those relating to Suspicious Transaction and Order Reports).
Categorisation under the Ethical Standard
7The purpose of the Ethical Standard is to ensure auditor integrity, objectivity and independence and to engender trust and confidence between users and practitioners. It recognises that the requirements necessary to meet the purpose of the Ethical Standard may vary, dependent on the circumstances of the engagement, and determines that additional independence requirements for audits of public interest and listed entities are justified by their broad stakeholder impact.
8Retail customers that are not connected with a company cannot invest in it on PISCES unless they have high net worth or are considered to be sophisticated investors, and private market assets form a small proportion of pension fund assets.1 The FRC considers that these factors, together with the current relatively light regulation of PISCES, indicate that the impact of companies listed on PISCES is currently sufficiently lower than that of those listed on Regulated Markets and MTFs to support their exclusion from listed status for the purpose of the Ethical Standard.
Changes in PISCES' regulatory position, and the need to maintain consistency of approach with any new exchanges that may be formed, may cause the FRC to reconsider this view. If this is the case, the FRC will provide notice of not less than one year.
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Pensions Policy Institute "Pension scheme assets – how is asset allocation changing and why?" 4 June 2025 estimates that 6% of UK pension assets were invested in domestic productive private markets in 2024. ↩