Unlocking PISCES: A New Era in UK Stock Trading with Stamp Duty Exemptions

The UK government is rolling out a novel financial initiative, designed to invigorate the trading landscape for private companies. The Private Intermittent Securities and Capital Exchange System (PISCES) is set to debut under a sandbox framework, offering a fresh trading platform with a key financial incentive: a complete exemption from Stamp Duty and Stamp Duty Reserve Tax (SDRT) on share transactions.

What is PISCES?

PISCES represents a pioneering type of stock market, tailored to allow private companies to trade shares intermittently. This innovative system operates under a Financial Market Infrastructure (FMI) sandbox, a regulatory environment that encourages experimentation with new financial technologies and practices. By facilitating this platform, the government aims to provide private enterprises with a stepping stone to public markets, enhancing their growth potential.

Why Exempt Stamp Duties?

Typically, transferring UK securities incurs either a Stamp Duty on paper documents or an SDRT on electronic agreements. However, under the PISCES sandbox, these transactions will be exempt from both taxes. This exemption is designed to make PISCES more attractive to private companies, allowing them to trade without the additional tax burden, thereby reducing administrative costs and simplifying the trading process.

The Legislative Landscape

The legislative framework for PISCES is grounded in the Financial Services and Markets Act 2023, with the legal structure further reinforced by the Finance Act 2025. These acts empower HM Treasury to adjust tax regulations, fostering an environment where novel financial systems like PISCES can be tested effectively.

Impact and Expectations

The introduction of PISCES is expected to have a negligible impact on businesses in terms of new administrative burdens. Instead, it promises significant savings by eliminating the need for stock transfer forms and reducing the complexity of accounting for stamp duties on trades.

Consultation and Reception

The government's proposal for PISCES was met with positive feedback during consultations. Stakeholders, including potential participants like companies, investors, and market operators, welcomed the tax exemption, seeing it as a catalyst for market participation and growth.

Looking Ahead

While the PISCES sandbox is initially set for a five-year trial, its success could lead to permanent integration into the UK's financial landscape, pending further legislative approval. HMRC will monitor the sandbox's progress, ensuring it meets its regulatory and economic objectives.

In summary, the PISCES initiative marks a significant step in modernizing the UK's financial market infrastructure. By exempting Stamp Duty and SDRT, the government aims to foster a more dynamic, accessible trading environment for private companies, paving the way for future financial innovations.