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HMRC's November 2025 Employment-Related Securities Bulletin explains how Enterprise Management Incentive (EMI) and Company Share Option Plan (CSOP) rules interact with PISCES, a new framework that enables qualifying private companies to open short, regulated trading windows for investors to buy and sell shares.
If you would like employees to be able to exercise options and sell shares during one of these PISCES trading windows while keeping the tax advantages of EMI/CSOP, you need to make sure your plan rules allow it in the right way. In particular, for any new EMI or CSOP options granted after the Finance Bill 2025-2026 comes into law, your plan rules will need to contain the right provisions from the start.
Why PISCES matters for employee options
PISCES (the Private Intermittent Securities and Capital Exchange System) is a new type of stock market for private company shares, which enables shares in qualifying private companies to be bought and sold during scheduled trading windows. Some employers may decide that they would like employees with share options to be able to exercise their options and then sell their shares during these windows, to realise the value in their shares.
The key timing point
HMRC has made a practical concession for EMI and CSOP options that already exist, but the timing is crucial.
- If the option was granted before the
Finance Bill 2025–2026 becomes law (Royal Assent is expected
around March/April 2026), employers can generally amend the
option's terms to add a PISCES-linked exercise right without
losing the tax benefits, as long as the amendments are made
appropriately.
- If the option is granted after the Finance Bill 2025–2026 receives Royal Assent, you cannot add a new PISCES exercise right later without removing the EMI/CSOP tax treatment. HMRC would treat that change as so fundamental that it is effectively a new, typically non-qualifying option.
What employers should do
For any EMI or CSOP options you plan to grant after Royal Assent, speak to a specialist share plan adviser about building appropriate PISCES exercise provisions into the option terms from the start.
For existing options granted before Royal Assent, you may wish to consider whether to amend them to allow exercise during PISCES windows, taking care to draft the changes so they preserve tax-advantaged status.
Because plan drafting and amendments can affect tax qualification, employers should take specialist advice on the wording and timing. The expected Royal Assent date is March/April 2026, so plan design decisions made in the coming months will be important.
In any case employers who are interested in building PISCES provisions into their option plans will need to carefully consider whether this is right in their circumstances, and work through the legal, tax and practical issues that arise if employees are to be given a new right of exercise. There remain some uncertainties around how PISCES is expected to work in practice in relation to employee share plans, and we share further thoughts on this here.
Other share plan points in HMRC's Bulletin
HMRC also covers several practical issues that may be relevant to employers running share plans:
- the treatment of managers' "sweet equity" in light of the BVCA Memorandum of Understanding;
- how to handle shares held in a terminating Share Incentive Plan (SIP) when employees cannot be traced; and
- reporting when personal representatives exercise share options after an employee's death.
The Bulletin can be found here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
