Citation, commencement and extent

regulation 1 + 1.—(1) These Regulations may be cited as the Financial Services and Markets Act 2023 (Private Intermittent Securities and Capital Exchange System Sandbox) Regulations 2025.

(2) These Regulations come into force on 5th June 2025.

(3) These Regulations extend to England and Wales, Scotland and Northern Ireland.

Interpretation

regulation 2 + 2.  In these Regulations—

term the act + “the Act” means the Financial Services and Markets Act 2023;

term authorised person + “authorised person” has the meaning given in section 31 of FSMA 2000(4);

term established in the uk + “established in the UK” means constituted under the law of any part of the United Kingdom and having, for the duration of the PISCES sandbox arrangements, a registered office or a head office in the United Kingdom;

term financial intermediary + “financial intermediary” has the meaning given in regulation 5(5);

term the fpo + “the FPO” means the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005(5);

term immediate group + “immediate group” has the meaning given in section 421ZA of FSMA 2000(6);

term intermittent + “intermittent”, in relation to a trading period, means occasional, not frequent, and of limited duration;

term mifir + “MiFIR” means Regulation (EU) No600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No648/2012(7);

term multilateral system + “multilateral system” has the meaning given in Article 2(1)(11) of MiFIR(8);

term overseas company + “overseas company” has the meaning given in section 1044 of the Companies Act 2006(9);

term pisces + “PISCES” has the meaning given in regulation 3(3);

term pisces approval notice or pan + “PISCES approval notice” or “PAN” means a notice given under regulation 10(3) approving a person described in regulation 4 to operate a PISCES;

term pisces company + “PISCES company” means a company whose shares are or are intended to be traded on a PISCES;

term pisces disclosure arrangements + “PISCES disclosure arrangements” means the arrangements for the disclosure of information by PISCES companies that PISCES disclosure rules require a PISCES operator to establish and maintain;

term pisces disclosure rules + “PISCES disclosure rules” means rules made by the FCA under paragraph (1) of regulation 14 which make provision of the kind mentioned in paragraph (4)(b) of that regulation;

term pisces operator + “PISCES operator” means a person in respect of whom an approval under regulation 10 is in force;

term pisces sandbox arrangements + “PISCES sandbox arrangements” has the meaning given in regulation 3(2);

term pisces share + “PISCES share” means a share in a PISCES company that is traded, or is to be traded, on a PISCES;

term pisces statement + “PISCES statement” means a statement made by a PISCES company through PISCES disclosure arrangements;

term the rao + “the RAO” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001(10).

term relevant pisces person + “relevant PISCES person” has the meaning given in regulation 12(3);

term specified pisces investor + “specified PISCES investor” has the meaning given in regulation 5(3).

Creation and operation of the PISCES sandbox

regulation 3 + 3.—(1) These Regulations have effect as an FMI sandbox (the “PISCES sandbox”) for the purposes described in section 13(1)(a) and (b) of the Act (testing of FMI technologies or practices), in so far as those purposes relate to the practice of operating a PISCES in the carrying on, as part of the business of a person specified in regulation 4, of the FMI activity of operating a multilateral system for the trading of shares.

(2) The FMI sandbox arrangements implemented as part of the PISCES sandbox (“the PISCES sandbox arrangements”) must relate to the FMI activity mentioned in paragraph (1), where carried on as mentioned in that paragraph.

(3) For the purposes of these Regulations, a “PISCES” is a multilateral system which—

regulation 3 3 a + (a)is for the trading of PISCES shares in intermittent trading periods,

regulation 3 3 b + (b)brings together multiple buying and selling interests in PISCES shares, in the system and in accordance with non-discretionary rules, in a way which results in a contract, and

regulation 3 3 c + (c)allows a PISCES company to determine at least one of the following in respect of the trading of its PISCES shares—

regulation 3 3 c i + (i)when the shares may be traded;

regulation 3 3 c ii + (ii)the persons or categories of person who may buy or sell the shares;

regulation 3 3 c iii + (iii)restrictions on the trading of the shares, including restrictions requiring a minimum or a maximum price;

regulation 3 3 c iv + (iv)the persons or categories of person who may receive information about the company or transactions in its shares.

(4) For the purposes of these Regulations, the appropriate regulator is the FCA.

Persons who may apply for approval to operate a PISCES

regulation 4 + 4.  An application to the FCA under regulation 9 for approval to operate a PISCES may be made by—

regulation 4 a + (a)a recognised investment exchange that is not an overseas investment exchange, or

regulation 4 b + (b)a person who is established in the UK and has a Part 4A permission, as defined in section 55A(5) of FSMA 2000 (application for permission)(11), to carry on one or more of the regulated activities referred to in the following provisions of the RAO—

regulation 4 b i + (i)article 25(1) (arranging deals in investments)(12);

regulation 4 b ii + (ii)article 25D (operating a multilateral trading facility)(13);

regulation 4 b iii + (iii)article 25DA (operating an organised trading facility)(14).

Other persons who may participate in the PISCES sandbox arrangements

regulation 5 + 5.—(1) The following descriptions of person may participate in the PISCES sandbox arrangements by using a PISCES or carrying on activities in connection with a PISCES—

regulation 5 1 a + (a)an eligible company;

regulation 5 1 b + (b)a person who is the registered holder of, is entitled to purchase or subscribe for, or is otherwise entitled to become the registered holder of, a PISCES share;

regulation 5 1 c + (c)a buyer of a PISCES share;

regulation 5 1 d + (d)a financial intermediary;

regulation 5 1 e + (e)persons who directly or indirectly provide services which relate to the trading of PISCES shares to—

regulation 5 1 e i + (i)an eligible company;

regulation 5 1 e ii + (ii)a person described in paragraph (1)(b) or (c);

regulation 5 1 e iii + (iii)a PISCES operator;

regulation 5 1 e iv + (iv)a financial intermediary;

regulation 5 1 f + (f)persons carrying on activities in connection with—

regulation 5 1 f i + (i)the trading of a PISCES share;

regulation 5 1 f ii + (ii)the provision of services as described in sub-paragraph (e).

term eligible company + (2) In paragraph (1), “eligible company” means a company as defined in section 1(1) of the Companies Act 2006 (companies) that is limited by shares, or an overseas company, except, in either case, if the shares of the company are admitted to trading—

regulation 5 2 a + (a)on a trading venue, as defined in section 313D(1) of FSMA 2000 (interpretation of Part 18A)(15), or

regulation 5 2 b + (b)on a multilateral system outside the United Kingdom.

term specified pisces investor + (3) In these Regulations, “specified PISCES investor” means—

regulation 5 3 a + (a)a professional client, as defined in Article 2(1)(8) of MiFIR (definitions)(16);

regulation 5 3 b + (b)an individual—

regulation 5 3 b i + (i)who within the period of twelve months ending with the day on which the trading period in question is due to end, has completed and signed a statement complying with Part 1 of Schedule 5 to the FPO (statement for high net worth individuals)(17), and

regulation 5 3 b ii + (ii)whose completion of the statement indicates that they satisfy the conditions set out in that statement to be classified as a high net worth individual;

regulation 5 3 c + (c)a person who falls within any of sub-paragraphs (a) to (c) of article 49(2) of the FPO (high net worth companies, unincorporated associations etc.)(18);

regulation 5 3 d + (d)an individual who has a certificate in writing or other legible form (a “PISCES sophisticated investor certificate”) relating to them, which—

regulation 5 3 d i + (i)is to the effect that the individual is sufficiently knowledgeable to understand the risks associated with an investment such as a PISCES share, and

regulation 5 3 d ii + (ii)is signed and dated by an authorised person within the three years ending with the day on which the trading period in question is due to end;

regulation 5 3 e + (e)an individual—

regulation 5 3 e i + (i)who within the period of twelve months ending with the day on which the trading period in question is due to end, has completed and signed a statement complying with Part 2 of Schedule 5 to the FPO (statement for self-certified sophisticated investors)(19), and

regulation 5 3 e ii + (ii)whose completion of the statement indicates that they satisfy the conditions set out in that statement to be classified as a self-certified sophisticated investor;

regulation 5 3 f + (f)a qualifying individual, as defined in regulation 6, but only in relation to the purchase of shares in the PISCES company in relation to which they are a qualifying individual;

regulation 5 3 g + (g)a person who is a relevant trustee, as defined in article 60(3) of the FPO, in relation to an employee share scheme, as defined in article 60(2) of the FPO (participation in employee share schemes)(20), of the PISCES company in question (but see the modifications to article 60 of the FPO in Part 5 of Schedule 1);

regulation 5 3 h + (h)a trustee of a share incentive plan as defined in section 488(4) of the Income Tax (Earnings and Pensions) Act 2003 (share incentive plans (SIPs))(21), established by the PISCES company in question or a company within its immediate group.

(4) For the purposes of paragraph (3)—

regulation 5 4 a + (a)the validity of a statement referred to in paragraph (3)(b) or (e) is not affected by a defect in the form or wording of the statement, provided that the defect does not alter the statement’s meaning;

regulation 5 4 b + (b)in the case of a person described in paragraph (3)(c), the reference in article 49(6)(b) of the FPO to the date on which a communication was first made or directed is to be read as referring to the date on which the trading period in question is due to end.

term financial intermediary + (5) In these Regulations, “financial intermediary” means—

regulation 5 5 a + (a)an authorised person;

regulation 5 5 b + (b)a member firm or participant with access to a PISCES;

regulation 5 5 c + (c)an appointed representative as defined in section 39(2) of FSMA 2000 (exemption of appointed representatives)(22).

Meaning of “qualifying individual”

term qualifying individual + regulation 6 + 6.—(1) “Qualifying individual”, in relation to a PISCES company and a trading period, means an individual whose inclusion on a list provided for that trading period by the PISCES company to a financial intermediary or PISCES operator indicates that the individual meets the qualifying conditions in paragraph (2).

(2) The qualifying conditions, in relation to a PISCES company, are that the individual—

regulation 6 2 a + (a)is employed by, or is a director or other officer of, the PISCES company or a company within its immediate group, or

regulation 6 2 b + (b)personally provides consultancy or managerial services—

regulation 6 2 b i + (i)as a party to a contract for services with the PISCES company or a company within its immediate group, or

regulation 6 2 b ii + (ii)which are placed at the disposal and under the control of the PISCES company or a company within its immediate group, under an arrangement between that company and a third party.

(3) A PISCES company must not include an individual’s name in a list supplied to a financial intermediary or PISCES operator for the purposes of paragraph (1) unless the individual falls within paragraph (2)(a) or (b).

(4) In paragraph (2)(a), a “director or other officer”, in the case of a PISCES company that is an overseas company, includes a manager or a secretary.

term third party + (5) In paragraph (2)(b)(ii), “third party” includes a company of which the individual in question is a director, member or employee.

Obligation on financial intermediary to check investor eligibility

term the client + regulation 7 + 7.—(1) A financial intermediary must not place an order to buy a PISCES share when dealing with a person (“the client”), whether directly, or through bare trustees, nominees or custodians, unless—

regulation 7 1 a + (a)the client is a qualifying individual as defined in regulation 6, or

regulation 7 1 b + (b)the financial intermediary believes on reasonable grounds that the client will fall within one or more of the other descriptions of specified PISCES investor in regulation 5(3) immediately before the order is to be executed.

(2) Where a financial intermediary receives an order to buy a PISCES share which—

regulation 7 2 a + (a)term a + is placed by a person (“A”) who is carrying on activities to which the exclusion in article 29(1) of the RAO (arranging deals with or through authorised persons)(23) applies, and

regulation 7 2 b + (b)results from A dealing with a client mentioned in paragraph (1) in the manner described in that paragraph,

paragraph (1) applies to the financial intermediary as if the financial intermediary were dealing directly with A’s client.

(3) The obligation in paragraph (1) does not apply—

regulation 7 3 a + (a)to a financial intermediary which is not established in the UK, unless they are dealing with a client in the manner described in that paragraph from a permanent place of business in the United Kingdom;

regulation 7 3 b + (b)where the financial intermediary believes, on reasonable grounds, that the client mentioned in paragraph (1) is—

regulation 7 3 b i + (i)an individual who is resident outside the United Kingdom, or

regulation 7 3 b ii + (ii)a body incorporated in, constituted or formed under the law of, a country outside the United Kingdom.

(4) Where a PISCES operator receives an order to buy a PISCES share for a person, without the involvement of a financial intermediary, paragraphs (1), (2) and (3)(b) apply to the PISCES operator as they apply to a financial intermediary.

Financial intermediary not to place certain orders for PISCES companies

regulation 8 + 8.—(1) A financial intermediary must not place an order for a PISCES company if the effect of that order would be that the PISCES company buys or sells its own PISCES shares.

(2) Where a PISCES operator receives orders without the involvement of a financial intermediary, the PISCES operator must not give effect to an order which would have the effect mentioned in paragraph (1).

PISCES application procedure and requirements

regulation 9 + 9.—(1) An application to the FCA for approval to operate a PISCES under the PISCES sandbox arrangements must—

regulation 9 1 a + (a)be made in such manner as the FCA may direct, and

regulation 9 1 b + (b)contain, or be accompanied by, such information that the FCA may reasonably require.

(2) The information required by the FCA under this regulation may include (among other things)—

regulation 9 2 a + (a)a description of an operational model which will facilitate the trading of PISCES shares and which may include (among other things)—

regulation 9 2 a i + (i)the use of a proposed trading system;

regulation 9 2 a ii + (ii)the proposed frequency and duration of the intermittent trading periods;

regulation 9 2 b + (b)a description of the restrictions on the trading of the shares that may be permissible at the instance of PISCES companies, including in particular any of the matters specified at regulation 3(3)(c);

regulation 9 2 c + (c)details of any requirements with which a company will be required to comply before its shares are traded on the PISCES;

regulation 9 2 d + (d)a description of the proposed disclosure arrangements and requirements for a PISCES company providing information to investors, and how the applicant would oversee them;

regulation 9 2 e + (e)a description of the arrangements for the detection and prevention of abusive trading behaviours on the PISCES;

regulation 9 2 f + (f)a risk assessment based on a description of the proposed operational model of the PISCES;

regulation 9 2 g + (g) a statement of the applicant’s reasons for applying to operate a PISCES under the PISCES sandbox arrangements;

regulation 9 2 h + (h)an explanation of how the applicant would comply with the requirements applicable to PISCES operators.

(3) At any time after an application is received and before it is determined, the FCA may require the applicant to provide it with such further information as it reasonably considers necessary to enable it to determine the application.

Determination of application to operate a PISCES

regulation 10 + 10.—(1) An application made under regulation 9(1) for approval to operate a PISCES under the PISCES sandbox arrangements must be determined by the FCA.

(2) The FCA may—

regulation 10 2 a + (a)approve the application;

regulation 10 2 b + (b)approve the application but with such conditions, limitations or restrictions as the FCA considers appropriate;

regulation 10 2 c + (c)reject the application.

(3) The FCA must—

regulation 10 3 a + (a)give the applicant written notice of its decision under paragraph (2);

regulation 10 3 b + (b)include details of any conditions, limitations or restrictions imposed under paragraph (2)(b) within the notice, and

in the case of approval, with or without conditions, limitations or restrictions, that notice is a PISCES approval notice (or “PAN”).

(4) The FCA must provide the applicant with a statement of its reasons for any determination under paragraph (2)(b) or (c).

(5) Each PISCES operator must either publish—

regulation 10 5 a + (a)its PAN, or

regulation 10 5 b + (b)information about the extent to which it is approved to participate in the PISCES sandbox arrangements and about any conditions, limitations or restrictions that may apply under paragraph (2)(b), or under paragraph (2)(b)(ii) or (3) of regulation 11.

(6) A PISCES operator that operates its PISCES otherwise than in accordance with any conditions, limitations or restrictions imposed by the FCA under paragraph (2)(b), or under paragraph (2)(b)(ii) or (3) of regulation 11, is to be taken to have contravened a requirement imposed on it by the FCA under these Regulations.

Further powers of the FCA in respect of PISCES approval notices

regulation 11 + 11.—(1) The FCA may, by direction, modify, suspend or cancel the PAN of a PISCES operator—

regulation 11 1 a + (a)on the application of or with the consent of the PISCES operator, or

regulation 11 1 b + (b) if the FCA considers that—

regulation 11 1 b i + (i)the PISCES operator has operated its PISCES otherwise than in accordance with any conditions, limitations or restrictions imposed by the FCA under regulation 10(2)(b), or under paragraph (2)(b)(ii) or (3), or any other requirement that applies to it in relation to its PISCES, or

regulation 11 1 b ii + (ii)it is appropriate to do so for the purposes of implementing and operating the PISCES sandbox arrangements.

(2) Where a PISCES operator has applied to the FCA to modify its PAN under paragraph (1)(a), the FCA may—

regulation 11 2 a + (a)require the operator to provide any information that the FCA considers necessary to allow it to determine the application;

regulation 11 2 b + (b)determine the application by—

regulation 11 2 b i + (i)approving the application;

regulation 11 2 b ii + (ii)approving the application with such (or such further) conditions, limitations or restrictions as the FCA considers appropriate;

regulation 11 2 b iii + (iii)rejecting the application.

(3) Where the FCA exercises its power under paragraph (1)(b) to modify a PAN, the FCA may impose such (or such further) conditions, limitations or restrictions as it considers appropriate.

(4) If the FCA exercises any of its powers under paragraph (1), it must—

regulation 11 4 a + (a)give the PISCES operator written notice;

regulation 11 4 b + (b)provide reasons for exercising the power;

regulation 11 4 c + (c) specify whether the modification, suspension or cancellation of the PAN takes effect immediately or on a specified date.

Sandbox arrangements

regulation 12 + 12.—(1) The relevant enactments(24) specified in Schedule 1 apply, with the modifications in that Schedule, to—

regulation 12 1 a + (a)the FCA in connection with implementing and operating the PISCES sandbox arrangements;

regulation 12 1 b + (b)the operation of a PISCES;

regulation 12 1 c + (c)a financial intermediary when using a PISCES or carrying on activities in connection with a PISCES;

regulation 12 1 d + (d)a parent undertaking, as defined in section 1162 of, and Schedule 7 to, the Companies Act 2006 (parent and subsidiary undertakings), of a PISCES operator;

regulation 12 1 e + (e)any other person in relation to the person’s—

regulation 12 1 e i + (i)participation in the PISCES sandbox arrangements;

regulation 12 1 e ii + (ii)use of a PISCES;

regulation 12 1 e iii + (iii)activities or conduct in connection with a PISCES or PISCES shares, and

other provisions in relevant enactments that refer to provisions so modified are to be treated as modified accordingly.

(2) Insofar as provisions of relevant enactments modified in Schedule 1 relate to the FCA exercising any of its powers, where a person was but has ceased to be—

regulation 12 2 a + (a)a PISCES operator,

regulation 12 2 b + (b)a parent undertaking of a PISCES operator within the meaning of paragraph (1)(d),

regulation 12 2 c + (c)a financial intermediary, or

regulation 12 2 d + (d)concerned in the matters mentioned in paragraph (1)(e)(i) to (iii),

the provisions continue to apply with respect to that person, in that capacity.

term relevant pisces person + (3) In Part 1 of Schedule 1, a “relevant PISCES person” means—

regulation 12 3 a + (a)a person participating in the PISCES sandbox arrangements under regulation 5(1);

regulation 12 3 b + (b)a person referred to in paragraph (1)(d), or (e)(ii) or (iii).

Liability for disclosed information

regulation 13 + 13.—(1) Where a PISCES company makes a PISCES statement the PISCES company is liable to pay compensation to a person who—

regulation 13 1 a + (a)buys, continues to hold or sells PISCES shares in that company, and

regulation 13 1 b + (b)suffers loss in respect of them as a result of—

regulation 13 1 b i + (i)any untrue or misleading information in the PISCES statement, or

regulation 13 1 b ii + (ii)the omission from the PISCES statement of any matter that is required to be included by rules made by the PISCES operator, whether those rules were made of the operator’s own volition or in order to comply with PISCES disclosure rules.

(2) Where the rules made by the PISCES operator that are mentioned in paragraph (1)(b)(ii) require a PISCES company to include in any statement information about the absence of a particular matter, the omission from the statement of that information is to be treated as a statement that there is no such matter.

(3) A loss is not to be regarded as suffered as a result of the statement or omission mentioned in paragraph (1), unless the person suffering it bought, continued to hold or sold the relevant shares—

regulation 13 3 a + (a)in reliance on the information in question, and

regulation 13 3 b + (b)at a time when, and in circumstances in which, it was reasonable for that person to rely on it.

(4) In Schedule 2—

regulation 13 4 a + (a)Part 1 makes provision about interpretation;

regulation 13 4 b + (b)Part 2 contains exemptions from liability under paragraph (1) for statements made by a PISCES company in order to comply with requirements placed on it by a PISCES operator in accordance with PISCES disclosure rules;

regulation 13 4 c + (c)Part 3 contains further exemptions from liability under paragraph (1) and exemptions from other liability.

Making of FCA rules

regulation 14 + 14.—(1) The FCA may make such rules as it considers to be necessary or expedient for the purpose of implementing and operating the PISCES sandbox arrangements.

(2) Rules made under paragraph (1) may apply to—

regulation 14 2 a + (a)a PISCES operator;

regulation 14 2 b + (b)persons falling within regulation 5(1);

regulation 14 2 c + (c)the scheme manager as defined in section 212 of FSMA 2000 (the scheme manager), in respect of the compensation scheme as defined in s213(2) of FSMA 2000 (the compensation scheme), so as to enable that scheme to make provision in respect of a PISCES;

regulation 14 2 d + (d)any other person in relation to the person’s—

regulation 14 2 d i + (i)use of a PISCES, or

regulation 14 2 d ii + (ii)activities or conduct in connection with a PISCES or PISCES shares.

term pisces operator + (3) In paragraph (2)(a), “PISCES operator” includes a parent undertaking, as defined in section 1162 of, and Schedule 7 to, the Companies Act 2006 (parent and subsidiary undertakings), of a PISCES operator.

(4) Rules made under paragraph (1) may (among other things) make provision—

regulation 14 4 a + (a)concerning the operation of a PISCES;

regulation 14 4 b + (b)imposing requirements as to arrangements for the disclosure of information by PISCES companies in connection with the trading of PISCES shares;

regulation 14 4 c + (c)concerning the detection and prevention of abusive, manipulative or deceptive trading behaviours on a PISCES;

regulation 14 4 d + (d)concerning the trading, promotion or distribution of PISCES shares,

including provision that applies before shares in a PISCES company are traded on a PISCES.

(5) The power to make rules in paragraph (1) includes the power to provide for—

regulation 14 5 a + (a)rules made by the FCA that are relevant enactments not to apply for the purposes of the PISCES sandbox arrangements;

regulation 14 5 b + (b)modifications in the application of such rules;

regulation 14 5 c + (c)the application of such rules (with or without modifications).

(6) The power to make rules in paragraph (1) also includes the power to make rules on the subject matter of a provision of a relevant enactment that has been disapplied by these Regulations.

(7) Paragraph (8) relates to—

regulation 14 7 a + (a)any rules made under paragraph (1); or

regulation 14 7 b + (b)any rules made by the FCA that are relevant enactments.

(8) The FCA may, by giving such direction as it considers to be necessary or expedient for the purpose of implementing and operating the PISCES sandbox arrangements, waive or modify a rule so as—

regulation 14 8 a + (a)not to apply to a person, or a description of a persons, falling within paragraph (2), or

regulation 14 8 b + (b)to apply, with such modifications (if any) as the FCA may specify, to a person or a description of a person falling within that paragraph.

(9) A direction under paragraph (8)—

regulation 14 9 a + (a)may be given subject to conditions, and

regulation 14 9 b + (b)may be revoked or varied by a subsequent direction.

Modification of technical standards

regulation 15 + 15.—(1) The FCA may make such modifications of any technical standards having effect for the purposes of a relevant enactment as it considers it to be necessary or expedient for the purposes of implementing and operating the PISCES sandbox arrangements.

(2) The power to modify technical standards in paragraph (1) includes the power to provide for—

regulation 15 2 a + (a)technical standards not to apply for the purposes of the PISCES sandbox arrangements;

regulation 15 2 b + (b)modifications in the application of the technical standards for those purposes;

regulation 15 2 c + (c)the application of the technical standards (with or without modifications) for those purposes.

(3) This regulation ceases to have effect when the repeal of section 138P of FSMA 2000 (technical standards)(25) by Part 4 of Schedule 1 to the Act comes into force.

Supervision of the FMI sandbox

regulation 16 + 16.—(1) The FCA must maintain arrangements for the supervision of the PISCES sandbox arrangements, including ongoing monitoring and supervision of each PISCES operator.

(2) The FCA may, by direction, require a PISCES operator—

regulation 16 2 a + (a)to provide specified information or documents reasonably requested in connection with the exercise by the FCA of functions conferred on it by or under these Regulations;

regulation 16 2 b + (b)to engage or cease engaging in a particular activity in connection with the PISCES sandbox arrangements, whether or not the FCA has exercised its powers under regulation 11.

(3) The FCA must publish on its website—

regulation 16 3 a + (a)any rules made under regulation 14(1);

regulation 16 3 b + (b)any directions given under regulation 14(8).

(4) The FCA may publish—

regulation 16 4 a + (a)the PAN of each PISCES operator;

regulation 16 4 b + (b)such other information concerning the PISCES sandbox arrangements as it considers appropriate.

Treasury power to direct FCA to impose restrictions

regulation 17 + 17.  The Treasury may, after consulting the FCA, direct it to impose restrictions on the overall activities of a PISCES operator in the PISCES sandbox arrangements, with reference to qualitative or quantitative criteria.

Amendment of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005

regulation 18 + 18.  In article 3 of the FPO (interpretation: unlisted companies)(26), after paragraph (1), insert—

“(1A) The shares in a body corporate are not to be regarded as falling within paragraph (1)(a) or (b) by reason only of either or both of the following—

(a) their being traded on a PISCES for which an operator has an approval in force under regulation 10 of the Financial Services and Markets Act 2023 (Private Intermittent Securities and Capital Exchange System Sandbox) Regulations 2025;

(b)information being communicated about prices at which persons have dealt or are willing to deal in them on such a PISCES.”.

Date of the report on the FMI sandbox arrangements

regulation 19 + 19.  The date specified for the purposes of section 14(3) of the Act (reports on FMI sandboxes) is 5th June 2029.

Termination

regulation 20 + 20.  These Regulations, except regulations 18 and 15, cease to have effect on 5th June 2030.

Schedules

Regulation 12

Schedule 1Modifications of legislation

Part 1Financial Services and Markets Act 2000

schedule 1 paragraph 1 + 1.  This Part sets out modifications of FSMA 2000. The provisions specified in the first column are modified as provided for in the corresponding entry in the second column.

Part 2Companies Act 2006

schedule 1 paragraph 2 + 2.  This Part sets out modifications of the Companies Act 2006. The provisions specified in the first column are modified as provided for in the corresponding entry in the second column.

Part 3The Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges, Clearing Houses and Central Securities Depositories) Regulations 2001

schedule 1 paragraph 3 + 3.  This Part sets out modifications of Part 1 (recognition requirements for investment exchanges) of the Schedule to the Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges, Clearing Houses and Central Securities Depositories) Regulations 2001(56). The provisions specified in the first column are modified as provided for in the corresponding entry in the second column.

Part 4The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005

schedule 1 paragraph 4 + 4.  This Part sets out modifications to the FPO. The provisions specified in the first column are modified as provided for in the corresponding entry in the second column.

Part 5Regulation (EU) No600/2014

schedule 1 paragraph 5 + 5.  This Part sets out modifications of Regulation (EU) No600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No648/2012. The provisions specified in the first column are modified as provided for in the corresponding entry in the second column.

Part 6Regulation (EU) 2017/1129

schedule 1 paragraph 6 + 6.  Treat Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC(65) as disapplied in its entirety.

Part 7Commission Delegated Regulation (EU) 2017/565

schedule 1 paragraph 7 + 7.  This Part sets out modifications of Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive(66). The provision specified in the first column is modified as provided for in the corresponding entry in the second column.

Regulation 13

Schedule 2Compensation: exemptions

Part 1Interpretation

schedule 2 paragraph 1 + 1.  In this Schedule—

term core disclosure + “core disclosure” means a PISCES statement made by a PISCES company in order to comply with requirements imposed on it by a PISCES operator in compliance with core disclosure rules;

term core disclosure rules + “core disclosure rules” means PISCES disclosure rules under which a PISCES operator must require PISCES companies to disclose, through PISCES disclosure arrangements, information about matters specified for this purpose in the PISCES disclosure rules;

term director + term disclosing officer + “disclosing officer” means, in relation to a PISCES company, its directors and any other person who is identified in a PISCES statement as accepting responsibility for the information contained within it, and “director” has the meaning given in section 417(1) of FSMA 2000;

term expert + “expert” includes any engineer, valuer, accountant or other person whose profession, qualifications or experience give authority to a statement made by the person;

term expert statement + “expert statement” means a statement included in a core disclosure which—

term omission + “omission” means an omission described in regulation 13(1)(b)(ii);

term relevant period + “relevant period” in relation to a PISCES statement, means the period beginning with the time when the company made the statement, and ending—

Part 2Exemptions from liability for core disclosures

Core disclosure

schedule 2 paragraph 2 + 2.—(1) A PISCES company does not incur any liability under regulation 13 for loss caused by untrue or misleading information in, or an omission from, a core disclosure if it satisfies the court that—

schedule 2 paragraph 2 1 a + (a) at the time the core disclosure was made, its disclosing officers reasonably believed, having made such enquiries (if any) as were reasonable, that—

schedule 2 paragraph 2 1 a i + (i)the information was true and not misleading, or

schedule 2 paragraph 2 1 a ii + (ii)the matter whose omission caused the loss was properly omitted, and

schedule 2 paragraph 2 1 b + (b) one of the conditions in sub-paragraph (2) is satisfied.

(2) The conditions are—

schedule 2 paragraph 2 2 a + (a)that the PISCES company’s disclosing officers continued in that belief until the end of the relevant period;

schedule 2 paragraph 2 2 b + (b)that before the end of the relevant period, the disclosing officers had taken all such steps as it was reasonable for them to have taken to secure that a correction was brought to the attention of persons who received the core disclosure.

(3) This paragraph is subject to paragraph 5 in respect of forward-looking statements contained in a core disclosure.

Expert statements

schedule 2 paragraph 3 + 3.—(1) A PISCES company does not incur any liability under regulation 13 for loss caused by an expert statement if it satisfies the court that—

schedule 2 paragraph 3 1 a + (a) at the time the core disclosure was made, its disclosing officers reasonably believed that the expert—

schedule 2 paragraph 3 1 a i + (i)was competent to make or authorise the statement,

schedule 2 paragraph 3 1 a ii + (ii)had consented to its inclusion in the form and context in which it was included, and

schedule 2 paragraph 3 1 b + (b) one or more of the conditions in sub-paragraph (2) are satisfied.

(2) The conditions are that—

schedule 2 paragraph 3 2 a + (a)the disclosing officers continued in that belief until the end of the relevant period;

schedule 2 paragraph 3 2 b + (b) the relevant period ended before it was reasonably practicable to bring the fact that the expert was not competent, or had not consented, to the attention of persons who received the core disclosure;

schedule 2 paragraph 3 2 c + (c)before the end of the relevant period, the disclosing officers had taken all such steps as it was reasonable for them to have taken to secure that that fact was brought to the attention of those persons.

Correction of expert statements

schedule 2 paragraph 4 + 4.—(1) A PISCES company does not incur liability under regulation 13 for loss caused by an expert statement if it satisfies the court that—

schedule 2 paragraph 4 1 a + (a)before the relevant period ended, a correction had been disclosed in a manner calculated to bring it to the attention of persons who received the core disclosure, or

schedule 2 paragraph 4 1 b + (b)the disclosing officers took all such steps as it was reasonable for them to take to secure such disclosure and reasonably believed that it had taken place before the end of the relevant period.

(2) Nothing in this paragraph is to be taken as affecting paragraph 3.

Part 3Further exemptions from liability and other provision

Forward-looking statements and other disclosure

schedule 2 paragraph 5 + 5.—(1) Unless the condition in sub-paragraph (2) is met, a PISCES company does not incur any liability under regulation 13 in respect of any loss caused by untrue or misleading information in or an omission from—

schedule 2 paragraph 5 1 a + (a)a forward-looking statement, or

schedule 2 paragraph 5 1 b + (b)a PISCES statement that is not a core disclosure.

(2) The condition is that at any time in the relevant period, any of the PISCES company’s disclosing officers—

schedule 2 paragraph 5 2 a + (a)knew the information to be untrue or misleading or were reckless as to whether it was untrue or misleading, or

schedule 2 paragraph 5 2 b + (b)knew the omission to be a dishonest concealment.

term forward looking statement + (3) In sub-paragraph (1), a “forward-looking statement” means a core disclosure which—

schedule 2 paragraph 5 3 a + (a)is of a kind specified for the purposes of this sub-paragraph in PISCES disclosure rules, and

schedule 2 paragraph 5 3 b + (b)is accompanied by a statement, in such form as may be required by those rules, which—

schedule 2 paragraph 5 3 b i + (i)identifies the core disclosure as a forward-looking statement, and

schedule 2 paragraph 5 3 b ii + (ii)refers to the effect of sub-paragraphs (1)(a) and (2).

Official communications

schedule 2 paragraph 6 + 6.  A PISCES company does not incur any liability under regulation 13 for loss resulting from—

schedule 2 paragraph 6 a + (a)a communication made by an official person which is included in a PISCES statement, or

schedule 2 paragraph 6 b + (b)a communication contained in a public official document which is included in a PISCES statement,

if it satisfies the court that the communication is accurately and fairly reproduced.

Exemptions from other liability

schedule 2 paragraph 7 + 7.—(1) Except for liability under regulation 13, a PISCES company is not subject to any other liability in respect of any loss caused by a PISCES statement.

(2) In sub-paragraph (1) the reference to liability, in relation to a PISCES company, includes a reference to another person being entitled as against that PISCES company to be granted any civil remedy or to rescind or repudiate an agreement.

(3) A person other than the PISCES company is not subject to any liability, other than to the PISCES company, in respect of a PISCES statement.

(4) This paragraph does not affect—

schedule 2 paragraph 7 4 a + (a)civil liability under rules made under section 954 of the Companies Act 2006 (compensation),

schedule 2 paragraph 7 4 b + (b)liability to a civil penalty,

schedule 2 paragraph 7 4 c + (c)criminal liability, or

schedule 2 paragraph 7 4 d + (d)the powers conferred by section 382 of FSMA 2000 (powers of the court to make a restitution order).

Explanatory Note

(This note is not part of the Regulations)

These Regulations provide for the testing of the efficiency and effectiveness of a new kind of share-trading system, the Private Intermittent Securities and Capital Exchange System, or PISCES. The PISCES sandbox is a financial markets infrastructure (“FMI”) sandbox provided for at sections 13 to 17 of the Financial Services and Markets Act 2023 (c. 29). FMI sandboxes provide for the testing of new or developing technologies or practices in FMI activities, and for the testing of whether or how relevant enactments should apply to the operation of a those new technologies or practices.

Regulation 3 explains what a PISCES is and specifies the type of FMI activity that may be carried on in the PISCES sandbox arrangements, and identifies the FCA as appropriate regulator.

Regulation 4 lists the types of FMI entity that are eligible to apply to participate as a PISCES operator.

Regulation 5 specifies the other categories of person that may participate in the PISCES sandbox.

Regulation 6 makes further provision about which individuals can participate in a PISCES as buyers of shares through their connection with a PISCES company, which is a company that is to have its shares traded on PISCES, or its group.

Regulation 7 requires financial intermediaries (as defined in regulation 5) to satisfy themselves, before placing a buy order received directly from an investor, that the investor comes within one of the categories of specified investor listed at regulation 5.

Regulation 8 prevents the placing of orders that would allow PISCES companies to buy or sell their own shares.

Regulations 9 and 10 specify the procedure by which a person who is eligible may apply to the FCA for approval to operate a PISCES, and set out the FCA’s powers in respect of applications and approvals, including powers to impose conditions, limitations or restrictions on the PISCES operator.

Regulation 11 confers powers on the FCA to modify, suspend or cancel a PISCES operator’s approval.

Regulation 12 provides that the relevant enactments specified in Schedule 1 have effect with the modifications specified in that Schedule in relation to the FCA and to the persons participating in the PISCES sandbox.

Regulation 13, together with Schedule 2, provides for a liability regime in respect of information disclosed in connection with trading on a PISCES.

Regulation 14 confers powers on the FCA to make rules (as well as powers to waive or modify rules) applying to PISCES operators and sandbox participants for the purpose of implementing and operating the PISCES sandbox arrangements.

Regulation 15 provides that the FCA may modify technical standards for the purpose of implementing and operating the PISCES sandbox arrangements.

Regulation 16 requires the FCA to maintain arrangements for the operation of the PISCES sandbox arrangements including monitoring and supervision of PISCES operators, provides a power of direction for the FCA over PISCES operators, allows the FCA to publish PISCES approval notices (defined in regulation 10(3)), and requires the FCA to publish details of the PISCES sandbox arrangements among other things.

Regulation 17 provides a power for the Treasury to impose restrictions on the overall activities of a PISCES operator within the PISCES sandbox.

Regulation 18 amends the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (S.I. 2005/1529) so that PISCES companies are treated as unlisted companies for the purposes of that Order.

Regulation 19 specifies the date by which the report on the sandbox arrangements required by section 14(2) of the Act (which is to be laid before Parliament under section 14(4)) must be prepared.

Regulation 20 specifies the date on which these Regulations are to cease to have effect.

Schedule 1, contains modifications to the following relevant enactments, for the purposes described in regulation 12:

• Part 1: the Financial Services and Markets Act 2000 (c. 8);

• Part 2: the Companies Act 2006 (c.46),

• Part 3: the Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges, Clearing Houses and Central Securities Depositories) Regulations 2001 (S.I. 2001/995),

• Part 4: the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005,

• Part 5: Regulation (EU)600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments,

• Part 6: Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC, which is disapplied entirely, and

• Part 7: Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive.

A de minimis impact assessment of the effect of this instrument is available from HM Treasury, 1 Horseguards Road, London SW1A 2HQ and is published alongside this instrument on www.legislation.gov.uk.