Hunt to set out plans for private companies to trade shares on exchanges

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Chancellor Jeremy Hunt is expected to set out plans in next week’s Budget for a regime to allow UK private companies to have their shares bought and sold on exchanges, with the aim of launching the system before the end of the year.

The Treasury is planning to start a consultation on Wednesday on the regulation of the initiative, which would give investors an opportunity to sell down part of their stakes in private companies on a limited number of days each year, an official told the Financial Times.

The idea for an “intermittent trading venue” was part of measures set out by Hunt in his Edinburgh reforms package in 2022 in an effort to boost the UK’s position as a global financial centre.

Ministers have been battling to shore up the UK’s capital markets, which have been hit by heavy investment outflows and a succession of companies floating overseas or moving their existing listings out of London, particularly in favour of the US.

The Private Intermittent Securities and Capital Exchange System (Pisces) would act as a crossover between public and private markets, allowing for some liquidity in the shares of private companies without the expense and regulatory burden attached to a public listing.

Companies would not be allowed to raise new capital through Pisces and retail investors were not expected to be permitted to buy shares using the system, the official said. Institutions and, if a company agrees, employees who owned shares in the business they work for would be allowed to trade via the system, the person added.

Proponents of the system, which would allow the London Stock Exchange and others to apply for permission to run Pisces trading venues, argue that it will boost the pipeline of London initial public offerings by encouraging companies to stay in the UK rather than listing overseas.

City minister Bim Afolami said…