ENGLAND & WALES Trends and Developments Contributed by: James Ross, Claire Matthews, Karen Bail and Marianna Vlas, Winston Taylor
The government’s call for evidence on entrepreneur - ship also touches on employee incentives, and there is a strong case for using that process to address remaining areas of improvement within the EMI frame - work, chief amongst these being: • the working time requirement – under which an employee must commit at least 25 hours per week, or 75% of their working time, to the company – which continues to cause difficulty for individuals in portfolio roles or with other professional commit - ments; • the personal grant limit of GBP250,000 – this being out of date and eroded by inflation; and • the HM Revenue & Customs (HMRC) valuation process, which, whilst generally workable, has at points been subject to delays that create real dif - ficulties for companies seeking to close incentive arrangements to a specific timetable. These are not insurmountable problems, but they do represent friction in a scheme that is otherwise widely regarded by founders and advisers as one of the most effective instruments available to the govern - ment for building equity-aligned teams at the growth stage. Addressing them would bring the EMI frame - work more closely into line with the modern realities of how high-growth companies operate and recruit. The government’s consultation provides a timely and appropriate vehicle through which to do so. PISCES: Addressing the Liquidity Challenge One of the practical limitations of EMI – and of employ - ee share schemes more generally – has always been the question of liquidity. Options and shares in private companies are, by their nature, illiquid, and employees who have built up a meaningful equity stake may face an indefinite wait before they are able to realise any value, typically dependent on a trade sale or a full list - ing. This is where the government’s recent introduc - tion of PISCES – the Private Intermittent Securities and Capital Exchange System – represents a poten - tially significant development. PISCES is designed to create a regulated, intermit - tent trading venue for shares in private companies, operating between the worlds of fully private owner - ship and a public market listing. For companies whose
employees hold EMI options or have exercised into shares, PISCES offers the prospect of periodic liquid - ity events without the cost, regulatory burden and dis - closure obligations associated with a full IPO. This is a meaningful advance: one of the recurring criticisms of equity incentive schemes in the UK has been that the ultimate payoff is too remote and uncertain to be an effective motivational tool, particularly for employees who are not founders and who may be less willing to wait years for a return. By providing a structured mechanism for employees to sell shares in the secondary market at defined inter - vals, PISCES has the potential to make EMI and other share schemes considerably more compelling in prac - tice. It also offers a natural staging post for companies that are considering a full listing but are not yet ready to commit to the obligations that entails. The trajec - tory of reform across both employee incentives and capital markets is therefore an encouraging one, and the interaction between EMI and PISCES may prove to be one of the more consequential developments of the current policy cycle. Revitalising public markets As well as providing a bridge for private companies towards a full listing in the form of PISCES, both the current government and its immediate predecessor have sought to ease some of the burdens associ - ated with full public listings. To that end, the regula - tory regime for listing companies in the UK was sig - nificantly overhauled in 2024. Data from the Financial Conduct Authority suggests IPO and listing activity picked up in the fourth quarter of 2025 after several years of broadly flat figures, but the number of listed companies has continued to decline, with delistings exceeding IPOs. Much of the blame for this is laid at the fact that the UK, unlike the USA and many other countries, still levies a transaction tax – stamp duty reserve tax (SDRT) – which is charged at 0.5% on the consideration paid under contracts for the sale of shares. The recent Budget sought to address this concern by introducing a three-year SDRT “holiday” (in other words, a time-limited exemption) for dealings in newly listed shares. Many advisers will have hoped for an abolition of SDRT altogether (together with its sister
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