FINANCIAL SERVICES AND MARKETS Citation, commencement and extent 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 2 In these Regulations— “ the Act ” means the Financial Services and Markets Act 2023; “ authorised person ” has the meaning given in section 31 of FSMA 2000 ; “ 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; “ financial intermediary ” has the meaning given in regulation 5 (5) ; “ the FPO ” means the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 ; “ immediate group ” has the meaning given in section 421ZA of FSMA 2000 ; “ intermittent ”, in relation to a trading period, means occasional, not frequent, and of limited duration; “ 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 ; “ multilateral system ” has the meaning given in Article 2(1)(11) of MiFIR ; “ overseas company ” has the meaning given in section 1044 of the Companies Act 2006 ; “ PISCES ” has the meaning given in regulation 3 (3) ; “ PISCES approval notice” or “PAN ” means a notice given under regulation 10 (3) approving a person described in regulation 4 to operate a PISCES; “ PISCES company ” means a company whose shares are or are intended to be traded on a PISCES; “ 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; “ 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; “ PISCES operator ” means a person in respect of whom an approval under regulation 10 is in force; “ PISCES sandbox arrangements ” has the meaning given in regulation 3 (2) ; “ PISCES share ” means a share in a PISCES company that is traded, or is to be traded, on a PISCES; “ PISCES statement ” means a statement made by a PISCES company through PISCES disclosure arrangements; “ the RAO ” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 . “ relevant PISCES person ” has the meaning given in regulation 12 (3) ; “ specified PISCES investor ” has the meaning given in regulation 5 (3) . Creation and operation of the PISCES sandbox 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— a is for the trading of PISCES shares in intermittent trading periods, 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 c allows a PISCES company to determine at least one of the following in respect of the trading of its PISCES shares— i when the shares may be traded; ii the persons or categories of person who may buy or sell the shares; iii restrictions on the trading of the shares, including restrictions requiring a minimum or a maximum price; 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 4 An application to the FCA under regulation 9 for approval to operate a PISCES may be made by— a a recognised investment exchange that is not an overseas investment exchange, or 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) , to carry on one or more of the regulated activities referred to in the following provisions of the RAO— i article 25(1) (arranging deals in investments) ; ii article 25D (operating a multilateral trading facility) ; iii article 25DA (operating an organised trading facility) . Other persons who may participate in the PISCES sandbox arrangements 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— a an eligible company; 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; c a buyer of a PISCES share; d a financial intermediary; e persons who directly or indirectly provide services which relate to the trading of PISCES shares to— i an eligible company; ii a person described in paragraph (1) (b) or (c) ; iii a PISCES operator; iv a financial intermediary; f persons carrying on activities in connection with— i the trading of a PISCES share; ii the provision of services as described in sub-paragraph (e) . 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— a on a trading venue, as defined in section 313D(1) of FSMA 2000 (interpretation of Part 18A) , or b on a multilateral system outside the United Kingdom. 3 In these Regulations, “ specified PISCES investor ” means— a a professional client, as defined in Article 2(1)(8) of MiFIR (definitions) ; b an individual— 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) , and 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; 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.) ; d an individual who has a certificate in writing or other legible form (a “PISCES sophisticated investor certificate”) relating to them, which— 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 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; e an individual— 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) , and 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; 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; 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) , of the PISCES company in question (but see the modifications to article 60 of the FPO in Part 5 of Schedule 1); 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)) , established by the PISCES company in question or a company within its immediate group. 4 For the purposes of paragraph (3) — 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; 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. 5 In these Regulations, “ financial intermediary ” means— a an authorised person; b a member firm or participant with access to a PISCES; c an appointed representative as defined in section 39(2) of FSMA 2000 (exemption of appointed representatives) . Meaning of “qualifying individual” 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— a is employed by, or is a director or other officer of, the PISCES company or a company within its immediate group, or b personally provides consultancy or managerial services— i as a party to a contract for services with the PISCES company or a company within its immediate group, or 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. 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 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— a the client is a qualifying individual as defined in regulation 6 , or 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— 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) applies, and 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— 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; b where the financial intermediary believes, on reasonable grounds, that the client mentioned in paragraph (1) is— i an individual who is resident outside the United Kingdom, or 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 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 9 1 An application to the FCA for approval to operate a PISCES under the PISCES sandbox arrangements must— a be made in such manner as the FCA may direct, and 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)— a a description of an operational model which will facilitate the trading of PISCES shares and which may include (among other things)— i the use of a proposed trading system; ii the proposed frequency and duration of the intermittent trading periods; 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) ; c details of any requirements with which a company will be required to comply before its shares are traded on the PISCES; 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; e a description of the arrangements for the detection and prevention of abusive trading behaviours on the PISCES; f a risk assessment based on a description of the proposed operational model of the PISCES; g a statement of the applicant’s reasons for applying to operate a PISCES under the PISCES sandbox arrangements; 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 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— a approve the application; b approve the application but with such conditions, limitations or restrictions as the FCA considers appropriate; c reject the application. 3 The FCA must— a give the applicant written notice of its decision under paragraph (2) ; 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— a its PAN, or 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 11 1 The FCA may, by direction, modify, suspend or cancel the PAN of a PISCES operator— a on the application of or with the consent of the PISCES operator, or b if the FCA considers that— 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 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— a require the operator to provide any information that the FCA considers necessary to allow it to determine the application; b determine the application by— i approving the application; ii approving the application with such (or such further) conditions, limitations or restrictions as the FCA considers appropriate; 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— a give the PISCES operator written notice; b provide reasons for exercising the power; c specify whether the modification, suspension or cancellation of the PAN takes effect immediately or on a specified date. Sandbox arrangements 12 1 The relevant enactments specified in Schedule 1 apply, with the modifications in that Schedule, to— a the FCA in connection with implementing and operating the PISCES sandbox arrangements; b the operation of a PISCES; c a financial intermediary when using a PISCES or carrying on activities in connection with a PISCES; 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; e any other person in relation to the person’s— i participation in the PISCES sandbox arrangements; ii use of a PISCES; 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— a a PISCES operator, b a parent undertaking of a PISCES operator within the meaning of paragraph (1) (d) , c a financial intermediary, or 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. 3 In Part 1 of Schedule 1 , a “ relevant PISCES person ” means— a a person participating in the PISCES sandbox arrangements under regulation 5 (1) ; b a person referred to in paragraph (1) (d) , or (e) (ii) or (iii) . Liability for disclosed information 13 1 Where a PISCES company makes a PISCES statement the PISCES company is liable to pay compensation to a person who— a buys, continues to hold or sells PISCES shares in that company, and b suffers loss in respect of them as a result of— i any untrue or misleading information in the PISCES statement, or 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— a in reliance on the information in question, and b at a time when, and in circumstances in which, it was reasonable for that person to rely on it. 4 In Schedule 2 — a Part 1 makes provision about interpretation; 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; c Part 3 contains further exemptions from liability under paragraph (1) and exemptions from other liability. Making of FCA rules 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— a a PISCES operator; b persons falling within regulation 5 (1) ; 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; d any other person in relation to the person’s— i use of a PISCES, or ii activities or conduct in connection with a PISCES or PISCES shares. 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— a concerning the operation of a PISCES; b imposing requirements as to arrangements for the disclosure of information by PISCES companies in connection with the trading of PISCES shares; c concerning the detection and prevention of abusive, manipulative or deceptive trading behaviours on a PISCES; 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— a rules made by the FCA that are relevant enactments not to apply for the purposes of the PISCES sandbox arrangements; b modifications in the application of such rules; 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— a any rules made under paragraph (1) ; or 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— a not to apply to a person, or a description of a persons, falling within paragraph (2) , or 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) — a may be given subject to conditions, and b may be revoked or varied by a subsequent direction. Modification of technical standards 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— a technical standards not to apply for the purposes of the PISCES sandbox arrangements; b modifications in the application of the technical standards for those purposes; 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) by Part 4 of Schedule 1 to the Act comes into force. Supervision of the FMI sandbox 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— 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; 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— a any rules made under regulation 14 (1) ; b any directions given under regulation 14 (8) . 4 The FCA may publish— a the PAN of each PISCES operator; b such other information concerning the PISCES sandbox arrangements as it considers appropriate. Treasury power to direct FCA to impose restrictions 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 18 In article 3 of the FPO (interpretation: unlisted companies) , 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 19 The date specified for the purposes of section 14(3) of the Act (reports on FMI sandboxes) is 5th June 2029. Termination 20 These Regulations, except regulations 18 and 15 , cease to have effect on 5th June 2030. Jeff Smith Vicky Foxcroft Two of the Lords Commissioners of His Majesty's Treasury 14th May 2025