1. Introduction: The Listing Gaps and the Shift to Private Capital
Europe has a listings problem. In 2025, the exchange groups represented by the Federation of European Securities Exchanges (FESE) — sixteen full members and one affiliate member operating across 32 countries — registered an average of just over 7,000 listed companies, slightly fewer than in 2024, while market capitalisation reached €14.8 trillion (FESE).
The European Central Bank estimates the average time from incorporation to an initial public offering (IPO) at 23.1 years for euro area firms, against 10.2 years in the US and the average age of listed firms at 40.1 years old in the euro area, against 23.6 years in the US (ECB Occasional Paper No 373). During this period, companies rely on successive venture capital and growth equity rounds. This leaves early investors and employees holding stock options without liquid exit mechanisms, while largely excluding institutional and retail investors from the phase in which a large portion of the value is created.
2. PISCES: Liquidity Without a Listing
The United Kingdom has sought to address this issue through the Private Intermittent Securities and Capital Exchange System (PISCES), which enables shares in private companies to be traded under a dedicated regulatory framework without those companies becoming publicly listed. The Financial Conduct Authority (FCA) published final rules in June 2025, and the PISCES sandbox — a temporary, five-year testing environment for innovative financial market infrastructure, set to expire in June 2030 — opened on 10 June 2025 (FCA).
Several features define the model. Trading is intermittent: platforms operate periodic trading events, which can take the form of auctions or time-limited periods of continuous trading. Subject to the operator’s rules and the FCA’s regulatory safeguards, participating companies retain a degree of control largely unavailable on public markets: they may determine when their shares are traded, restrict who may purchase them, set floor and/or ceiling prices, and limit access to information about the company or transactions in its shares.
Purchases are confined to specified categories of investors, including professional clients, high-net-worth individuals and entities, as well as sophisticated and self-certified investors, qualifying individuals such as employees and certain connected persons, and relevant employee share-scheme trustees. Disclosure is event-based: FCA rules prescribe mandatory core information, which operators must implement through their rulebooks, while retaining flexibility over additional disclosure arrangements.
Critically, PISCES is exclusively a secondary market for existing shares: it cannot be used for primary issuance or share buybacks. Its direct function is to provide shareholder liquidity rather than capital formation, although access to a broader investor base may indirectly strengthen a company’s capital-raising prospects outside PISCES.
The FCA approved the London Stock Exchange as the first PISCES operator on 26 August 2025 and JP Jenkins as the second on 18 November 2025. The first trading events took place in March 2026: JP Jenkins concluded its QPlay auction on 24 March, followed the next day by the inaugural permissioned auction on the London Stock Exchange’s Private Securities Market.
PISCES neither transforms a participating company into a public company nor makes its shares continuously liquid. Instead, it creates periodic, regulated opportunities for secondary trading among eligible investors, under FCA rules, platform requirements and lawful company restrictions.
Whether these concentrated trading windows generate sufficient liquidity and price discovery to alter market behaviour is the sandbox’s central empirical question. The European Union must decide whether to await evidence from the British experiment before acting or to develop a comparable framework while the sandbox is still running.
3. The European Union’s Response
On 19 March 2025, the European Commission announced measures to support exits by investors in private companies, possibly through multilateral intermittent trading of private company shares.
On 2 March 2026, the European Commission published a targeted consultation on private equity exits and a possible multilateral platform for intermittent secondary trading of private company shares. Comprising 82 principal questions in three parts, the consultation originally set a deadline of 27 April but ultimately closed on 11 May 2026. Its foundations lie in the 2024 Draghi report and the Savings and Investments Union strategy of March 2025. The design questions revisit some of the choices the United Kingdom has already made.
EU trading venues operate within a common financial regulatory framework, including the Markets in Financial Instruments Directive II (MiFID II), the Markets in Financial Instruments Regulation (MiFIR), the Market Abuse Regulation and the Prospectus Regulation, but the Commission canvasses several alternatives: a temporary or permanent sandbox granting exemptions from existing legislation, potentially subject to a size threshold, or a bespoke, potentially permanent, alleviated legal regime.
The Commission separately asks whether the operator should be a supervised entity authorised under the existing EU acquis, receive bespoke authorisation or merely notify its activity to a supervisor. The Commission also considers whether supervision should be European, national or hybrid, and whether the Market Abuse Regulation should apply fully or only in its core elements.
The sharpest divergence from the British solution seems to be purpose. PISCES is secondary only: it permits neither new share issuance nor company buybacks. The Commission asks whether its platform should also support fresh equity raising, which could bring the Prospectus Regulation into play depending on the structure of the offering and the availability of exemptions.
4. Portugal: Opportunity and Challenge
Portuguese companies benefit from a relatively robust ecosystem of publicly backed financing. Yet the liquidity problem facing existing shareholders and investors, and potentially deterring new ones, remains unresolved. The €200 million Fundo 200M, managed by Banco Português de Fomento, co-invests alongside private venture capital investors; Portugal Ventures manages approximately €182 million; and the Recovery and Resilience Plan introduced separate venture capital and co-investment programmes, each endowed with €200 million. Although their structures differ, these instruments share a common purpose: they channel fresh capital into companies, primarily through equity investments, grants or loans, while leaving the liquidity needs of existing shareholders largely unaddressed.
This gap can be filled by bespoke arrangements. Sword Health ran a private liquidity event in which employees sold roughly USD 100 million of their own shares, with some USD 54 million realised by around a hundred Portuguese employees. That is precisely the type of transaction the European initiative seeks to bring within a regulated framework.
Yet a European platform would not, on its own, reach much of the Portuguese market. The overwhelming majority of Portuguese companies are sociedades por quotas (a form of Portuguese private limited liability company), whose quotas (equity interests) are not securities, cannot be admitted to trading. Transfer of a quota requires a separate act of commercial registration and, as a default rule, the company’s consent. Before Portugal can connect to whatever Europe builds, it has a commercial law problem to solve. A multilateral trading platform would currently be viable only for sociedades anónimas (Portuguese public limited liability company), which carry governance requirements that many small and medium-sized companies prefer to avoid: a minimum share capital of €50,000, at least five shareholders as a rule, and a mandatory supervisory body.
5. Corporate Law Implications
For sociedades anónimas, the governing provision is Article 328 of Código das Sociedades Comerciais (Portuguese Companies Code or “CSC”). The articles of association may not exclude transferability but may subject transfers of shares to the company’s consent, establish pre-emption rights, or impose subjective or objective requirements consistent with the corporate interest. Article 329 governs the consent mechanism, vesting such power in the general meeting, unless the articles of association attribute it to another corporate body. Since bearer shares were abolished by Law No. 15/2017, these clauses are universally available to sociedades anónimas. Alongside them sit shareholders’ agreements under Article 17 of the CSC and drag-along and tag-along mechanisms, which are purely contractual.
These clauses serve legitimate functions, but sit uneasily with multilateral trading, which presupposes that traded assets can be freely transferred. Under PISCES, the company’s control over who may hold its shares is not removed but is exercised ex ante, at the level of each trading event and by reference to categories of investor, rather than by approving each individual transfer. A European regime would need to allow a similar approach — most plausibly by requiring that tradable shares be subject to articles of association that expressly contemplate platform trading, with prior waiver or automatic exercise of consent and pre-emption rights.
6. Conclusion
PISCES moved from framework to first trades in under a year, and the Commission’s consultation makes clear an EU equivalent is under active consideration. For Portugal, this is both an opportunity and a challenge. Participation requires more than transposition: the legislator should consider whether Article 328 of the CSC can accommodate the prior, platform-level exercise of consent and pre-emption rights that organised intermittent trading demands — and whether the sociedade por quotas, the form used by most Portuguese companies, offers any viable path at all. The alternative is not neutrality. If the EU takes too long, European founders and investors will continue to turn to US platforms such as Forge Global or Nasdaq Private Market — or, as Sword Health shows, to bespoke arrangements outside any supervisory perimeter. Either way, the price is measured in the erosion of European capital market sovereignty.
