European Commission consultation on private equity exits: A new framework for secondary trading in private company shares

RegCORE Client Alert | Capital Markets Union + Savings and Investment Union

Quick Take

On 2 March 2026, the European Commission published a targeted consultation on private equity exits and the possible development of multilateral intermittent trading platforms for private company shares. The consultation runs until 27 April 2026 and must be responded to via an online questionnaire.Documents available here.Show Footnote It forms part of the wider Savings and Investments Union (SIU) strategy, which seeks to deepen and better integrate European capital markets, unlocking more financing opportunities for companies and supporting innovation and growth in the EU economy.See our extensive thought leadership contributions on the SIU available here and equally, as a comparator, on the UK’s PISCES framework available here.Show Footnote The consultation aims to address challenges in private market liquidity, improve exit options for private equity investors and facilitate access to capital for private companies within the EU.

The consultation addresses concerns over declining productivity growth in the EU, which has been linked to insufficient innovation and a shortage of innovative companies. By identifying and removing investment barriers, the initiative aims to enhance the attractiveness of EU private assets and better support the growth of private companies as they progress towards public markets.

Private equity investors and private companies should review the consultation and consider submitting responses via the online questionnaire before the 27 April 2026 deadline. Engagement in the consultation process would enable stakeholders to participate in the shaping of future exit routes and improving access to capital in the EU private equity market.

Background and policy rationale

The consultation is rooted in the findings of the 2024 Draghi report,See our thought leadership available here.Show Footnote which identified insufficient innovation and a lack of innovative companies as a principal cause of the decline in EU productivity growth. As a remedy, the Draghi report called for an increase in private investment to strengthen the EU's capacity to innovate and grow. The SIU strategy, presented in the Commission Communication of 19 March 2025, responded to this diagnosis by seeking to unlock more financing opportunities for EU companies, including through deeper and better-integrated capital markets.

A key observation underlying this consultation is the growing trend of companies choosing to remain private for longer, whether to retain control over their development, limit competitive disclosure or for other strategic reasons. This poses a particular challenge for existing private equity investors, as an IPO may no longer be a straightforward exit option when companies remain private for an indefinite period. The Commission notes that, despite some improvement in the ratio of divestment at cost in 2025, private equity investors continue to find it generally difficult to exit their investments. From an EU competitiveness and access-to-finance perspective, this matters because it may constrain the scale-up phase of firms and increase reliance on bank financing, which may not always be suitable for high-growth business models.

The lack of suitable exit options is frequently cited as one of the main reasons for the underdevelopment of venture, growth and private equity funds in the EU. The illiquidity of private markets may make private equity less appealing to limited partners, and high-growth companies may be prompted to move abroad in search of funding, creating economic security concerns about foreign takeover. This risk may be particularly relevant in the fragmented EU market, where cross-border capital raising and secondary transactions remain more complex than in other major jurisdictions.

Focus of the consultation

The consultation identifies limited and costly exit options for private equity investors, illiquidity in private markets and fragmented cross-border conditions as key factors constraining the scale-up phase of firms and deterring institutional capital from investing in EU private assets.

The consultation is targeted mainly at private equity investors and private companies and is structured in three main parts:

1. Challenges for private equity exits and attracting private equity investors in the EU.
2. A potential EU framework for an intermittent multilateral secondary trading platform for private company shares.
3. Possible use of such a platform for raising fresh equity capital.

Breaking down the barriers to private equity investment and exits

In Part I of the consultation, the Commission examines which challenges EU investors encounter when attempting to exit their investments in private companies. It further explores whether these challenges impact the ability of private equity and growth companies to secure funding at the outset. Currently, sales of shares in private companies are organised on a bilateral basis, with sellers or the company itself reaching out to potential buyers through private networks or broker-dealer services, and identification of potential buyers is often challenging.

The consultation also enquires about potential regulatory measures that could help address these exit-related obstacles, the costs associated with different exit strategies and, more broadly, seeks input on ways to enhance support for investment in private companies. Facilitating exits from investments in private companies may incentivise potential shareholders to invest in companies where capital might otherwise be locked up for an indefinite time, creating new funding opportunities for private companies.

The Commission has already taken important steps in this area, including the adoption of the Solvency II Delegated Act and guidance on the prudential treatment of equity investments at the end of October 2025, and a package of pension measures in November 2025 aimed at enhancing the capacity of institutional investors to invest in private assets. The Commission is also preparing a legislative initiative on venture and growth capital funds, expected to be adopted later in 2026, with the aim of enhancing the scale, cross-border activity and competitiveness of relevant fund managers.

Creation of an “Intermittent Multilateral Secondary Trading Platform”

In Part II of the consultation, the Commission examines the potential for creating an intermittent multilateral secondary trading platform as a new exit route for private equity investors in the EU. The Commission envisages that trading private company shares on such a platform could bring together supply and demand more efficiently, ensure more effective price discovery, reduce costs through standardised procedures and speed up the process from the offer or investment decision to the conclusion of the transaction. Over the long term, this could lead to more liquidity in the private equity market, increase asset turnover and make it more attractive to invest in EU private assets.

The focus is on designing a regulatory framework that would enable such a platform to function efficiently, ensure effective price determination and provide appropriate investor protection, potentially through a tailored disclosure regime. To this end, the consultation centres on a number of key framework requirements:

• Regulatory approach. The consultation canvasses three broad regulatory options: (a) a time-limited sandbox regime, temporarily disapplying certain provisions of financial legislation applicable to trading in financial instruments; (b) a permanent sandbox regime, permanently disapplying certain such provisions, possibly subject to a turnover threshold; or (c) a new bespoke regulatory regime (lex specialis) for multilateral intermittent trading of private company shares.
• Authorisation and supervision. Irrespective of the option chosen, the Commission suggests it may be appropriate to require the operator of an intermittent trading platform to be adequately authorised and supervised. Options include requiring authorisation as an investment firm under MiFID II, permitting market operators under MiFID II to operate such platforms, or creating a bespoke authorisation regime.
• Market abuse safeguards. The Commission identifies that appropriate safeguards to protect investors and prevent market abuse should be considered and suggests it might be appropriate to consider applying certain core aspects of the market abuse framework. The consultation notes that multilateral markets with a low level of liquidity may be especially vulnerable to manipulative practices.
• Investor participation. The Commission envisages potentially limiting participation to certain types of investors at the outset, such as institutional investors, companies conducting buybacks and a defined group of high-net-worth individual investors.
• Company control and confidentiality. The consultation suggests that participating companies might retain a certain degree of control over the trading of, and disclosure of information on, their shares. At the same time, the level of disclosure should be well-calibrated to balance companies' interest in protecting proprietary activities against investors' interest in knowing what they are buying.

The aim is to enhance the attractiveness of private markets by making exits easier and supporting companies as they move towards public markets. Creating appropriate regulatory conditions for efficient and effective intermittent trading of private company shares on a multilateral platform should not be seen as a substitute for public listings (IPOs); instead, it should improve the overall attractiveness of private markets by facilitating exits and ultimately supporting participating companies in their transition towards public markets.

Comparison of the Commission’s proposals with the UK's PISCES Framework

The Commission's consultation should be considered alongside the UK's Private Intermittent Securities and Capital Exchange System (PISCES) platform, developed to address similar concerns. The PISCES framework's rules came into force in June 2025 and it is currently operating in a sandbox phase until 2030. It may serve as a source of inspiration for any potential EU equivalent.See thought leadership available here.Show Footnote

The consultation canvasses a wide range of options that could lead to an EU regime quite different from PISCES. Nevertheless, the introductory section of the consultation signals a potential direction of travel by highlighting certain potentially appropriate features. Drawing primarily on that introductory discussion, several key similarities and differences between the potential EU approach and the PISCES framework can be identified.

Similarities

Several elements of the Commission's thinking resemble the PISCES design:

• 'Private plus' regulatory philosophy. PISCES departs from the traditional 'public minus' regulatory design model for growth markets, which starts with public market standards and lightens them. PISCES is 'private plus' by design, meaning it takes private market practices and risk tolerances as the starting point and adds regulatory requirements only where necessary to support intermittent public trading. The Commission similarly notes that "an intermittent trading framework should adequately reflect the specificities of private markets compared to trading on public markets."
• Private perimeter for disclosures. The Commission suggests limiting issuer disclosures and trading transparency data to investors participating in a trading event, which resembles the private perimeter in the PISCES framework.
• Calibrated core disclosure. The Commission envisages mandatory disclosure of appropriately calibrated core information to investors, broadly consistent with the PISCES framework, which relies on bespoke issuer disclosure requirements based on the 'buyer beware' concept of private markets.
• Issuer control. The consultation suggests that participating companies might retain "a certain degree of control over the trading of their shares," including identifying investors who may participate in individual trading events and setting parameters for price formation, consistent with the approach under PISCES.
• Restricted investor participation. The Commission indicates that participation might initially be limited to certain types of investors, not including retail investors. The PISCES framework similarly excludes general retail participation but does allow access for employees of participating companies and certain sophisticated or high-net-worth retail investors. Notably, the Commission suggests allowing the platform to be used for share buybacks, which PISCES does not currently allow.
• Sandbox as an option. The PISCES framework is a five-year regulatory sandbox. A time-limited sandbox is one of three options suggested by the Commission for how the EU platform could be constituted.

Key differences

Potential divergence between the Commission's thinking and PISCES is most visible in two areas:

• Market abuse. The Commission identifies that appropriate safeguards to prevent market abuse should be considered and that it might "be appropriate to consider applying certain core aspects of the market abuse framework." Under the PISCES framework, by contrast, the civil market abuse and criminal insider dealing regimes do not apply to shares traded on a PISCES platform. The difference between the EU and UK on this element can be summarised as being whether to follow the 'buyer beware' norms of the private equity market, where market abuse rules do not apply, or the investor protection and market integrity norms of public markets. The Commission's observation that "multilateral markets with a low level of liquidity may be especially vulnerable to manipulative practices" suggests it may favour stronger integrity safeguards.
• Primary capital raising. The PISCES framework is strictly for secondary market trading and primary capital raising is not permitted. The restriction of PISCES to secondary market trading appears to owe more to regulatory policy sequencing between the PISCES initiative and other work on revising prospectus requirements and related exemptions, rather than being rooted in fundamental principle; the UK government has pledged to keep all elements of the PISCES design under review. The Commission, by contrast, appears open to allowing primary issuance, noting that this could mean "alleviations and efficiency gains a private placement cannot offer."

Potential use of the platform to raise fresh equity capital

In Part III of the consultation, the Commission examines the potential benefits and drawbacks of allowing private companies to use intermittent secondary trading platforms not only for facilitating exits but also for raising new capital. Potential benefits identified include a speedier process, lower costs and access to a wider range of investors. The sale of shares through the platform could mean alleviations and efficiency gains a private placement cannot offer. Part III also seeks to understand the possible interactions with other sources of equity financing, such as bank lending, and whether the availability of such a platform might incentivise or disincentivise listing on a public market.

Whether dedicated regulatory frameworks for intermittent trading platforms will significantly expand secondary markets in shares of privately owned companies remains to be seen. The very first liquidity event on a UK PISCES platform has been scheduled for later in March 2026, for a small venture capital-backed board game company, and the practical experience from this initial event will be informative.

Academic and practitioner commentary has identified several potential niches for such platforms. For founders, a liquidity event on a PISCES-type platform could be a stepping stone to an initial public offer. For private equity investors, it may offer a (partial) exit route for investments in portfolio companies. For growth companies, the availability of a secondary liquidity mechanism could enhance the attractiveness of share-based employee incentives. However, some commentary suggests that PISCES may prove more useful as a mechanism for employee and founder/early investor liquidity than as a significant exit channel for private equity, raising questions about the practical appeal for the PE sector. One concern is the possibility that prices set in liquidity events could leak into the public domain notwithstanding confidentiality conditions. Against this background, it is notable that the Commission's consultation explicitly links the potential EU platform to private equity exits.

The development of the EU's framework for intermittent trading in private company shares therefore merits close attention. Should the UK and EU ultimately adopt regimes that pursue broadly similar aims but with different design features, the divergence may create a natural experiment. Comparing the performance of the two regimes could yield valuable insights on the calibration of regulatory requirements to market preferences, and which combinations of 'private plus' requirements are most aligned with those preferences.

Outlook

The Commission's consultation on private equity exits and the potential development of intermittent multilateral trading platforms marks a further step towards addressing longstanding challenges in the EU's private equity and growth markets. The initiative aims to enhance liquidity, transparency and access to capital for private companies, while also supporting more efficient and cost-effective exit routes for investors.

For regulated firms, the consultation raises a number of important strategic and compliance considerations. Investment firms, fund managers, credit institutions and insurance companies that invest in or facilitate private equity transactions should carefully assess how the proposed framework might affect their business models, particularly in relation to authorisation requirements, market abuse obligations, investor eligibility criteria and disclosure standards. The interplay between any new regime and existing legislation, including MiFID II, MiFIR, the Market Abuse Regulation and the Prospectus Regulation, will be a key area to monitor as the initiative progresses.

Private equity investors and private companies should review the consultation and consider submitting responses via the online questionnaire before the 27 April 2026 deadline. Engagement in the consultation process would enable stakeholders to participate in the shaping of future exit routes and to help ensure that the potential benefits and costs of any new framework are sufficiently considered.

About us

PwC Legal is assisting a number of financial services firms and market participants in forward planning for changes stemming from relevant related developments. We have assembled a multi-disciplinary and multijurisdictional team of sector experts to support clients navigate challenges and seize opportunities as well as to proactively engage with their market stakeholders and regulators.  

Moreover, we have developed a number of RegTech and SupTech tools for supervised firms, including PwC Legal’s Rule Scanner tool, backed by a trusted set of managed solutions from PwC Legal Business Solutions, allowing for horizon scanning and risk mapping of all legislative and regulatory developments as well as sanctions and fines from more than 2,500 legislative and regulatory policymakers and other industry voices in over 170 jurisdictions impacting financial services firms and their business. 

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The PwC Legal Team behind Rule Scanner are proud recipients of ALM Law.com’s coveted “2024 Disruptive Technology of the Year Award” and the “2025 Regulatory, Governance and Compliance Technology Award in 2025”.  

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