In this article for the Financial Times, Cees Vermaas, CEO of The International Stock Exchange (TISE), explores how UK economic growth can be unlocked by secondary trading platforms such as TISE Private Markets. 

The UK economy desperately needs growth. That growth can come from incentivising investment, from both institutional and retail investors, as well as democratising access to capital, and providing much-needed liquidity solutions. We are all too familiar with the need for publicly listed companies to have more liquidity in their shares and a platform for further capital raising. Against this backdrop, we have seen more companies choose to stay private for longer. And for us at The International Stock Exchange (TISE), that was an opportunity to build on our strengths as a leading European bond listing venue by innovating and providing a solution for private companies to trade their shares. But TISE Private Markets does not stop there. It also taps into the Channel Islands’ thriving financial industry, by delivering a platform that addresses developing trends both in the funds industry and tokenisation.

Out of the UK’s workforce of 33.8 million, 27.9 million work for a private company. Over the past decade, the number of private companies has increased by more than 2,849, bringing the total to 19,483 firms, each employing over 100 people. That’s huge. On the other hand, the number of listed companies is declining and, in the same timeframe, has gone down by 429 and now stands at 1,107 (excluding investment trusts). The private company sector is now 17 times larger than the public. But for such a large part of the economy, trading private company shares has not been simple.

"Private companies have historically struggled to find an efficient mechanism for share trading."

Private companies have historically struggled to find an efficient mechanism for share trading. While there are some existing secondary market liquidity platforms, these rely on traditional public market infrastructure providers, such as fee-charging brokers and other intermediaries.

An anticipated development is the Private Intermittent Securities and Capital Exchange System (PISCES), which Chancellor Rachel Reeves has committed to establishing by May this year. Once introduced, it will enable the likes of the London Stock Exchange Group to operate a platform that would allow a company to go public temporarily while providing access to a wider pool of investors before reverting to its private status.

We will wait until the launch to see what the final framework will look like, but from what we know now, PISCES will bring with it many of the obligations of being a publicly listed company. This includes the involvement of brokers and other intermediaries who charge fees and commissions for their services. So PISCES will maintain additional bureaucracy and costs, which are part of the reasons why private companies want stay private.

"So PISCES will maintain additional bureaucracy and costs, which are part of the reasons why private companies want stay private."

That’s why we created TISE Private Markets, a fully disintermediated trading proposition which provides private companies and other managers of private assets with their own 'stock exchange in a box'. Based in Guernsey, it’s a secondary market for private company shareholders to buy and sell shares, without the need for an expensive listing and intermediary broker fees. 

Our first client was Blue Diamond Limited, one of the largest garden centre groups in the UK and the Channel Islands. The company turned to TISE Private Markets because its share register management was manual and time-consuming, and the mechanism for share trading was inefficient. Blue Diamond feared losing control of the shareholder base and higher costs if they were to be publicly listed. But with our solution, they avoided those challenges.

"...a fully disintermediated trading proposition which provides private companies and other managers of private assets with their own 'stock exchange in a box'."

TISE Private Markets also provides further solutions for the broader private markets, including funds and tokenised assets. The platform facilitates the trading of tokens without buyers and sellers paying any commission or fees to trade. One asset class that would benefit from tokenisation is real estate. Tokenisation would simplify the whole real estate purchasing process, allowing properties to be divided into tokens, enabling individual investors to purchase a fractional share or shares of a property whilst using smart contracts during trading to automate transactions and remove intermediaries.
  
The importance of tapping into those pockets of capital is crucial to the whole financial ecosystem, with the UK being especially attuned to this. The funds sector is one area that could benefit from this. As a Guernsey-headquartered business, we know our island channels large amounts of capital investment into the UK, with Guernsey-based funds currently holding UK assets worth £57 billion. 

Fund managers are looking to access new sources of capital, and wealth managers are seeking better returns for their clients by enabling them to access private funds, which have typically only been available to mainly institutional investors. However, simple and seamless entry and exit opportunities are essential to capture this wider investor pool. TISE Private Markets offers this by providing a platform through which fund managers can host regular scheduled auctions that drive both liquidity and growth.

"TISE Private Markets also provides further solutions for the broader private markets, including funds and tokenised assets."

By facilitating liquidity events across a wide range of assets, from private companies to funds, TISE Private Markets exemplifies the kind of innovation and diversification from Guernsey that can help the UK Chancellor unlock growth.

This article was originally published in May 2025 as Guernsey Finance partner content with the Financial Times and is available from FT.com here.