TLDR: The UK’s Financial Conduct Authority (FCA) has launched the Private Intermittent Securities and Capital Exchange System (PISCES), a new private stock market designed to facilitate secondary trading of shares in unlisted companies. While intended to boost liquidity and investment, critics like Carrie Osmon warn that PISCES could exacerbate ‘Fear Of Missing Out’ (FOMO) investing due to less stringent disclosure requirements and time-pressured trading events, citing past examples like WeWork and AI-focused Builder.ai.
The Financial Conduct Authority (FCA) has officially brought into force the regulations governing the Private Intermittent Securities and Capital Exchange System, or PISCES, a new private stock market set to launch later in 2025. This innovative platform aims to allow private companies to unlock liquidity and provide exit opportunities for shareholders without undergoing the traditional Initial Public Offering (IPO) process. The FCA views PISCES as a crucial step in strengthening UK capital markets and fostering economic growth, with Simon Walls, executive director of markets at the FCA, stating, ‘This bold design rebalances risk, but it is bold risk-taking that made the UK the leading financial centre it is today.’ Emma Reynolds, Economic Secretary to the Treasury, echoed this sentiment, calling PISCES ‘a great example of industry, regulators and the government working together to go further and faster on innovative reforms.’
However, the introduction of PISCES is not without its critics. Carrie Osmon, among others, has raised significant concerns that the new framework risks fanning the flames of ‘Fear Of Missing Out’ (FOMO) investing. Osmon argues that while the initiative appears beneficial on the surface, it could exacerbate a trend of impulsive investment decisions driven by the fear of missing out on high-growth opportunities.
The mechanism of PISCES contributes to this concern. Unlike an IPO, businesses trading shares via PISCES markets are not required to submit the same level of detailed information. Shares will be auctioned off to qualified investors over pre-designated periods, with the highest bidder winning. This combination of reduced scrutiny, time-pressured deals, and prevalent ‘tech hype’ creates a potentially disastrous environment for FOMO-driven investments.
Historical examples underscore these risks. WeWork, which famously reached a $47 billion valuation in 2019 before filing for bankruptcy just four years later, serves as a cautionary tale of money flowing into a company despite clear financial red flags. More recently, the generative AI boom has seen a rush of investment, leading to instances like the Builder.ai disaster. Builder.ai, which quickly achieved unicorn status with investments from Microsoft and Qatar’s sovereign wealth fund, appointed administrators less than a decade after its inception. Reports indicated that its sales figures were grossly inflated and its touted AI-powered functionality was secretly enabled by human workers. These cases highlight how FOMO, coupled with a lack of thorough due diligence, can lead to substantial losses.
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Access to PISCES will be limited to institutional investors, high-net-worth individuals, sophisticated investors, and employees of participating companies. The FCA has stated that investors will be provided with risk warnings to help them make informed decisions, and the system will initially be developed using a financial markets infrastructure (FMI) sandbox to allow for testing and refinement before a permanent regime is implemented. Despite these safeguards, the inherent structure of PISCES, with its intermittent trading events and potentially less transparent information, raises valid questions about its capacity to mitigate, rather than amplify, the risks associated with FOMO investing in the private markets.
