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LSE gets approval from FCA to operate first PISCES

platform

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UK authorities seeking to stem delistings, capital

outflows

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Private capital markets booming

(Recasts, adds FCA quote in paragraph 8, LSE in paragraph 9,

background throughout)

LONDON, Aug 26 (Reuters) - The London Stock Exchange ( LDNXF )

has become the first company to win regulatory approval

to operate a new platform allowing investors to trade shares in

private companies, Britain's financial watchdog said on Tuesday.

The Financial Conduct Authority said the approval of the LSE

as an operator of a Private Intermittent Securities and Capital

Exchange System (PISCES) platform marked a "major milestone" in

an effort to boost growth and unlock capital markets.

Britain set out draft rules last year to allow trading in

private companies on regulated exchanges in the hope of stemming

delistings and outflows from UK capital markets and offering

private firms a quicker route to new investors.

The LSE plans to launch its private securities market later

this year. The PISCES design will be delivered initially through

a "sandbox", which allows the FCA to test the design before a

permanent regime is finalised in 2030.

Other markets offer similar regulated platforms. Rival

exchange Nasdaq in New York has long had a private

market segment.

PISCES could help small companies with limited experience of

capital markets get onto the radar of cash-rich and supportive

investors without a full-scale initial public offering.

But the concept has proven a tough sell with some market

participants concerned it could cannibalise companies that would

have otherwise sought market listings. Bankers told Reuters

earlier this year they feared hits to revenue and ultimately

being bypassed in a booming market for private capital.

Simon Walls, FCA executive director of markets, said the

approval of the first PISCES operator in Britain heralded the

start of a competitive market that offered greater investor

access to growth companies.

"This new market demonstrates our commitment to the creation

of a genuine funding continuum from the private to public

markets so that businesses in the UK and around the world can be

effectively supported across all stages of their growth," said

LSE Chief Executive Julia Hoggett.