The Private Intermittent Securities and Capital Exchange System (Exemption from Stamp Duties) Regulations 2025
These regulations, effective July 3rd, 2025, exempt stamp duties on PISCES share transfers occurring within a designated sandbox environment established under the Financial Services and Markets Act 2023.
The regulations define key terms like "PISCES," "PISCES sandbox arrangements," and "PISCES share" by referencing the Financial Services and Markets Act 2023 (Private Intermittent Securities and Capital Exchange System Sandbox) Regulations 2025.
An accompanying explanatory note clarifies the exemption's purpose and directs readers to a Tax Information and Impact Note for further details.
Arguments For
Increased innovation in financial markets: The exemption encourages the development and testing of innovative financial technologies like PISCES.
Reduced regulatory burden for startups: Lowering stamp duty simplifies the process for new companies using this system, fostering competition and growth.
Alignment with broader regulatory objectives: The exemption supports the government's aim to create a more innovative and competitive financial sector as outlined in the Financial Services and Markets Act 2023.
Evidence-based policy: The exemption is likely informed by assessments of the potential economic benefits of PISCES and the impact of stamp duty on its adoption.
Targeted implementation: The exemption is limited to the PISCES sandbox, managing any potential risks associated with broader exemptions.
Arguments Against
Potential revenue loss for the government: The exemption reduces stamp duty revenue, potentially putting strain on public finances.
Risk of misuse or exploitation: The sandbox environment might be exploited for tax avoidance or other improper activities.
Limited scope of the exemption: Only a specific type of share transfer within a defined set of circumstances qualifies, and other financial instrument transfers will still be subject to stamp duties.
Implementation hurdles: Ensuring proper monitoring and oversight to prevent abuse within the regulated environment will require robust systems and enforcement mechanisms.
Unintended consequences: The exemption might lead to unforeseen effects on the broader financial market or investor behavior.
- Citation and commencement These Regulations may be cited as the Private Intermittent Securities and Capital Exchange System (Exemption from Stamp Duties) Regulations 2025 and come into force on 3rd July 2025.
These regulations are officially titled the "Private Intermittent Securities and Capital Exchange System (Exemption from Stamp Duties) Regulations 2025" and became effective on July 3rd, 2025.
- Exemption from stamp duties (1) The transfer of a PISCES share in connection with trading activity that takes place on a PISCES under the PISCES sandbox arrangements is exempt from all stamp duties. (2) In this regulation— “PISCES” has the meaning given in regulation 3(3) of the PISCES Sandbox Regulations; “PISCES sandbox arrangements” has the meaning given in regulation 3(2) of the PISCES Sandbox Regulations; “PISCES Sandbox Regulations” means the Financial Services and Markets Act 2023 (Private Intermittent Securities and Capital Exchange System Sandbox) Regulations 2025; “PISCES share” has the meaning given in regulation 2 of the PISCES Sandbox Regulations.
Section 2 establishes the core exemption.
It exempts stamp duty on PISCES share transfers during trading on a PISCES system, subject to the 'PISCES sandbox arrangements'.
The section then defines key terms: 'PISCES,' 'PISCES sandbox arrangements,' 'PISCES Sandbox Regulations,' and 'PISCES share' by referencing their respective definitions within the PISCES Sandbox Regulations.
Explanatory Note (This note is not part of the Regulations) These Regulations provide an exemption from all stamp duties on the transfer of a PISCES share in connection with trading activity that takes place on a PISCES under the PISCES sandbox arrangements described in regulation 3(2) of the Financial Services and Markets Act 2023 (Private Intermittent Securities and Capital Exchange System Sandbox) Regulations 2025 (‘the PISCES Sandbox Regulations’). The PISCES Sandbox Regulations have effect as an FMI sandbox within the meaning of section 13 of the Financial Services and Markets Act 2023 (c. 29). A PISCES is a new kind of share-trading system that will allow private companies to have their shares traded intermittently and is defined in regulation 3(3) of the PISCES Sandbox Regulations. A Tax Information and Impact Note covering this instrument was published on 30th October 2024, and is available on the government website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins. It remains an accurate summary of the impacts that apply to this instrument.
The explanatory note summarizes the regulations' purpose: to exempt stamp duty on PISCES share transfers within the sandbox.
It clarifies the regulations' relationship with the Financial Services and Markets Act 2023 and defines PISCES as a new share-trading system.
The note also references a Tax Information and Impact Note for further information on the regulatory impacts.