Trading on Private Intermittent Securities and Capital Exchange Systems (PISCES) has begun in the UK, with JP Jenkins and LSE completing their first events. Yet details of these events have been sparse, with the “private-plus” markets leaning “private” when it comes to trade transparency.
Under UK MiFIR, PISCES platforms are not classified as trading venues and are not beholden to venue transparency requirements. The FCA will therefore not publish volumes executed, although operators may publish their own figures.
In the PISCES Sourcebook, the FCA states: “A Pisces operator must make available the instrument identification, price, volume and time of the transactions executed on the Pisces. The Pisces operator must make details of all such transactions available to members, participants and investors entitled to trade on the relevant Pisces trading event as close to real-time as is technically possible.”
This information is not publicly reported.
Even within private publications, the information included in PISCES disclosures has been shrunk. In June, the regulator published its final PISCES rules: and pulled back on its regulatory ideals.
After market feedback, the FCA removed post-trade disclosures from core disclosure requirements. “Some respondents though post-trade disclosures would give investors useful transparency. [Others] thought they would be duplicative and burdensome for companies as the same information would be provided in the core disclosure information before any next trading event.”
The degree of information that would be disclosed about companies by operators was also cut back, with market size and position no longer included in the required core disclosure information.
Further, the final rules stated, “We are removing the requirement for disclosures to be easily analysable, concise and comprehensive to reduce burdens for PISCES operators and companies and to align with private market practice. We expect companies would need to make clear disclosures for investors to trade in their shares.”
JP Jenkins closed its first trading window on Tuesday, a day before the LSE opened its own. The liquidity event took place between 18 and 24 March for trading of shares in games company Qplay, which has a £42 million market cap. Although details of the trades have not been shared, the operator has lauded the event as a success.
Based on the company’s market cap and the 1,369,705 shares issued, shares in Qplay traded at £30.66 during the event.
JP Jenkins was the second firm to be approved by the FCA to operate a PISCES, and announced its launch of a platform in December.
READ MORE: JP Jenkins races forward with wholesale PISCES solution
Elsewhere, the first transaction on the LSE’s Private Securities Market (PSM) was executed on 25 March. Tradable Private Equity (TPE) used a proprietary investment structure to offer shares in investment company Oxford Science Enterprises (OSE), which has a portfolio valued at £1.3 billion.
READ MORE: PISCES preps for first private equity auction to the public
Commenting on the transaction via LinkedIn, LSEG CEO Julia Hoggett said, “We are committed to creating a funding continuum that supports companies at every stage of their liquidity journey. This is about reconfiguring our capital markets.”
Simon Olsen, a partner in Deloitte’s ECM team, added, “Early indications are that these initial auctions will be the first of many. We are currently working with several companies who are actively preparing for an auction under the PISCES framework in the coming months.”
At TradeTech last May, the FCA’s director of infrastructure and exchanges, supervision, policy and competition for markets Jon Relleen stated that PISCES would reduce the “cliff edge” between private and public markets, adding, “We understand there is a demand for a regulated marketplace around some second market transactions in the private space”. So far, it appears that there is still a clear division between public and private markets – especially when it comes to transparency.
