UK follows in island’s footsteps with pared-down stock exchange

The UK's prospective move into private markets follows Guernsey's lead, but does not appear to overly concern the local stock exchange.

Its proposed Private Intermittent Securities and Capital Exchange System, or Pisces, will serve companies that, for one reason or another, are not looking to list on the London Stock Exchange.

A consultation on the idea was announced by UK Chancellor Jeremy Hunt in his Budget last week.

TISE CEO Cees Vermaas said this did not come as a surprise – it was first mentioned in December 2022 as being something the government was working towards.

‘It is something we have been following closely while developing and delivering our own innovative service for private companies,’ he said.

‘We are very proud that during 2023 we launched and on-boarded our first client, Blue Diamond, and that the company is now seeing real value in using TISE Private Markets.’

The UK Finance Ministry said that Pisces would allow investors to ‘gain better access to exciting companies and benefit from greater transparency and efficiency than available in private markets.

‘This proposal will support the pipeline for future initial public offerings (IPOs) in the UK, by improving the interface between private companies and UK public markets, and complementing the government’s wide ranging and ongoing reforms to boost the UK as a listing destination.’

Mr Vermaas said the proposal showed that TISE was right in its thinking that public markets were not adequately serving small and medium-sized enterprises.

‘But these companies require capital markets solutions which will enable them to grow,’ he said.

Many SMEs have found that the cost and regulatory burden of being listed outweighed the benefits, leading to many staying private for longer, while some listed firms have decided to return to private ownership.

There were several differences between what was being proposed and the TISE offering, Mr Vermass said.

‘It remains to be seen if Pisces will truly meet the needs of SMEs or whether they will still be subject to over-burdensome regulation and the costs of working with intermediaries.’

TISE’s own offering which provided trading, settlement and share registry management without the need for intermediaries, was continuing to generate significant interest from private companies across the Channel Islands, the UK and further afield.

• Pisces is being proposed because of the growth in private markets compared to public markets. Research has shown that over the last 10 years the UK economy has added 3,096 private companies with 100 or more employees, while the number of companies listed on stock exchanges has reduced by 270.