Share option plans are typically built around one defining moment. An exit. A sale. An IPO. A transaction where employees finally realise the value they’ve helped create.
The proposed introduction of the Private Intermittent Securities and Capital Exchange System (PISCES) signals a shift in how private companies may approach share option plans.
Rather than waiting for a full exit, businesses could offer structured trading windows that allow shareholders, including option holders, to sell shares while the company remains private.
Testing for PISCES is now at an advanced stage, and it’s expected that the first auctions on the platform will likely commence in early 2026.
For leadership teams, this creates an immediate and practical question. If a trading window opened tomorrow, could your option holders exercise and sell?
For many companies, the answer is no. Not because the business wouldn’t want them to participate, but because the option terms were never designed with this type of event in mind.
A welcome shift for EMI and CSOP options
Historically, amending the exercise terms of tax-advantaged options has been high risk. Bringing forward the ability to exercise an option could potentially jeopardise the tax benefits that make EMI and CSOP so valuable.
HMRC have suggested a more relaxed approach to PISCES-related amendments and have indicated that options granted before 6 April 2028 are expected to be capable of amendment to include a PISCES-linked exercise event.
After 6 April 2028, the ability to amend will be stripped away, and any new option grants will need to have PISCES flexibility embedded into option terms from the outset.
Any amendments made would be without losing tax advantages, provided the new legislative requirements are met. These requirements state that options may only be exercised where the resulting shares are sold via a PISCES trading event immediately, and that any amendment to option terms must be formally agreed with the option-holder, or otherwise confirmed to them in writing.
Provided these requirements are met, and wider EMI/CSOP qualifying conditions continue to be met, companies should be able to introduce a PISCES exercise trigger without jeopardising the tax-advantaged status of the option.
As ever, forward-looking plan design is essential and will be easier than a last-minute patch-up.
The bottom line
PISCES has the potential to reshape how private companies think about shareholder liquidity. For share plans, it represents both an opportunity and a prompt to revisit option documentation written a long time ago.
The encouraging news is that tax-advantaged options should be capable of evolving alongside this new market, provided amendments are handled carefully and within the legislative framework.
Businesses that prepare early will be far better placed to offer employees meaningful participation when the opportunity arises.
If you are considering how PISCES could interact with your share plans, whether reviewing existing documentation, updating option terms or designing future-ready incentives, our Equity Rewards & Venture Capital Schemes team are here to help.
