New liquidity pathway for growth companies – what do founders need to know?

The London Stock Exchange has launched the Private Securities Market, a new venue enabling private companies to offer intermittent, structured secondary liquidity for shareholders without becoming public companies. The Private Securities Market operates within the Financial Conduct Authority’s PISCES regulatory regime - a legislatively established market sandbox designed specifically for intermittent private-company trading windows.

For founders and growth‑stage businesses, the Private Securities Market opens a meaningful new route for employee liquidity, early investor exits and cap table management, while preserving private‑company status. 

In this article we outline Private Securities Market and what it means for founders, investors and scaling private companies. We also explain how it enables structured liquidity while allowing businesses to remain private, and explores the benefits, risks and eligibility requirements.

Why this matters for founders

The Private Securities Market is designed for venture‑backed, scaling businesses that want:

• Controlled, periodic liquidity events via auctions.
• To avoid the continuing obligations and scrutiny of public markets.
• To remain private while using public‑market infrastructure.

This is the first time UK private companies have access to an exchange-operated auction mechanism without being subject to public-market-style continuous disclosure.

Key features of the Private Securities Market

You stay private - no continuous disclosure, no UK Market Abuse Regulation in its usual form

Companies provide only an intermittent Core Disclosure ahead of each auction event. There is no continuous reporting requirement and responsibility for disclosure rests with the company rather than the London Stock Exchange.

Auctions are intermittent and fully controlled by the company

Trading occurs only during scheduled auctions, either:

• Open auctions - all eligible PISCES investors
• Permissioned auctions - restricted based on objective criteria set by the company

Companies determine the timing and frequency of auctions, for example annually, biannually or quarterly, subject to minimum notice and disclosure requirements.

Importantly, the Private Securities Market is not a retail market. Participation is limited to eligible PISCES investors and companies retain the ability to restrict auction access, making this very different from a public listing.

Investor engagement is structured but optional

The Private Securities Market disclosure portal includes an investor Q&A facility. Companies choose whether to respond to questions and must state their position by 'Auction Day (AD)‑1'.

Liability sits with the company, not the London Stock Exchange

Disclosure is not vetted or approved by the London Stock Exchange. Instead, the PISCES framework establishes a bespoke statutory liability regime under which investors may pursue claims directly against issuers where Core Disclosure is inaccurate or misleading.

The London Stock Exchange retains powers to protect market integrity

The London Stock Exchange may delay, halt or refuse auction events and may terminate participation where significant compliance, governance or market integrity concerns arise.

Eligibility: is my company suitable?

Companies must meet at least two of the following, or alternative measures accepted at the London Stock Exchange’s discretion:

• £10m+ fundraising in last 3 years with independent investor participation
• £20m+ total assets
• £10m+ annual turnover

Companies must also have:

• At least two directors with appropriate financial and reporting expertise.
• Shares that are freely transferable and eligible for electronic settlement.
• Sufficient governance, controls and resources to meet intermittent disclosure obligations.

For many venture-backed scaleups, these thresholds are achievable once the business has reached later growth stages.

What companies must disclose

The mandatory Core Disclosure, using a prescribed form, covers:

• Business and management overviews
• Financial statements - three years if available
• Capital structure and major shareholders - cannot be omitted except in very narrow circumstances
• Directors’ past transactions and trading intentions ahead of an auction - cannot be omitted
• Price parameters for the auction

Companies may also provide Voluntary Disclosure, entirely at their discretion.

When disclosures are due: the key timeline

Minimum auction timetable:

• AD‑10: submit auction application and draft Core Disclosure
• AD‑6: all confirmations finalised
• AD‑5 (08:00): publish final Core Disclosure
• AD‑4 (16:00): investor Q&A period closes
• AD‑1 (08:00): company posts investor Q&A responses or confirms it will not respond

In practice, this means governance, financial reporting and disclosure processes must be prepared well in advance of a proposed auction.

Advantages for founders

• Structured liquidity for employees and early investors.
• Greater control over timing, frequency and participants in liquidity events.
• Avoidance of continuous public-market disclosure obligations.
• Opportunity to test valuation and broaden the investor base ahead of a potential future initial public offering.
• Ability to remain private while accessing exchange infrastructure.

Risks and obligations

• Disclosure creates legal liability under the PISCES statutory framework.
• Governance, compliance and record-keeping expectations are materially higher than in traditional private secondaries.
• Directors’ trading intentions and historic trades must be disclosed.
• The London Stock Exchange may intervene where market integrity concerns arise.
• Complaints or material developments during an auction process may trigger additional disclosure obligations.

Is the Private Securities Market right for your company?

The Private Securities Market is likely be of particular interest to:

• Scaleups with mature governance but not initial public offering‑ready
• Companies seeking employee liquidity without a full secondary programme
• High‑growth businesses wanting intermittent price discovery
• Founder‑led companies wishing to stay private while expanding their investor base

We expect early adoption from high-profile growth companies looking to establish structured liquidity programmes ahead of potential future public market activity.

In summary

The Private Securities Market represents an important new option in the UK liquidity landscape rather than a replacement for existing routes. For growth companies that have reached a level of maturity where shareholders seek liquidity, but where an initial public offering would be premature or disproportionate, it offers a structured middle ground between private secondaries and public markets. 

However, while the disclosure regime is more flexible than a listing, participation still requires governance standards, internal controls and disclosure discipline closer to public markets than traditional private company transactions. 

For founders, the key question is therefore not simply whether liquidity is desirable, but whether the business is operationally and culturally ready to operate within a more formal market environment while remaining private.

For further information please contact our corporate team.