Spring Budget 2024: Hunt considering plans for private firms to trade shares on exchanges

Chancellor Jeremy Hunt is reportedly considering launching a system for UK private firms to have their shares traded on exchanges before the end of this year as the Treasury looks to strengthen the country’s capital markets.

The Financial Times reported that Hunt was expected to lay out the plans in Wednesday’s Spring Budget, with the Treasury aiming to start a regulatory consultation on the same day.

Under the Private Intermittent Securities and Capital Exchange System (Pisces), investors would be able to partly sell down their stake in private firms on a limited number of days per year, an unnamed official told the paper.

It comes as Hunt aims to boost capital markets activity in the UK amid a slump in public listings and big names snubbing the London Stock Exchange in favour of floating in New York.

Just 23 companies floated in London last year. This figure was down from 45 in 2022, which itself was a 62 per cent drop compared with a record 119 listings in 2021.

Pisces, which Hunt first laid out plans for as part of the Edinburgh Reforms in 2022, aims to allow private firms to raise capital in a similar manner to their public counterparts.

City minister Bim Afolami said in January the system would also “break down the artificial regulatory cliff edge that exists between the public and private markets”.

The London Stock Exchange and other bourses would apply for permission to manage Pisces trading venues.

However, the private firms’ shares are not expected to be offered to retail investors and companies would not be able to raise new capital through the system, it was reported.

Across the pond, US private company shares have been traded on the Nasdaq Private Market since 2013.

City A.M. approached the Treasury for comment.