Britain’s financial sector is preparing for a dramatic shift as a new private share trading platform is set to reshape how private companies raise capital and how investors gain access to high-growth firms. The introduction of this platform has triggered a brewing conflict between traditional banks and established exchanges over who will control—and profit from—the lucrative fees tied to private share transactions.
A New Frontier for UK Markets
In an effort to boost innovation and attract startups, UK regulators and market players are backing the launch of a private share trading venue that allows institutional and accredited investors to trade shares of unlisted companies. The platform, expected to go live in late 2025, aims to provide much-needed liquidity for private firms, bridging the gap between private and public markets.
This initiative mirrors similar developments in the US, where platforms like Nasdaq Private Market and Forge Global have facilitated secondary share sales for years. With an eye on retaining high-growth companies in the UK and attracting global investment, Britain’s version is expected to become a cornerstone of the evolving capital markets ecosystem.
Who Gets the Fees?
However, the emergence of this new trading platform has ignited a fierce debate: who will take the lion’s share of the transaction fees?
Traditionally, banks have dominated the private fundraising space by arranging funding rounds, setting valuations, and managing shareholder registers. Exchanges, meanwhile, have handled the public trading infrastructure. But in this hybrid model—where private companies can trade like public firms without a full listing—those boundaries blur.
Banks argue that their longstanding relationships with companies and investors position them to continue managing these trades and charging associated fees. On the other hand, exchanges claim they provide the infrastructure and regulatory compliance that make such platforms viable, and thus deserve a significant cut.
Exchanges Eye Disruption
The London Stock Exchange (LSE) and other trading venues are actively positioning themselves as central players in this new ecosystem. They argue that by bringing transparency and efficiency to traditionally opaque private markets, they are adding significant value.
“We are creating a trusted environment for institutional investors to access private company shares,” said an LSE spokesperson. “This is not just a marketplace—it’s a revolution in capital markets.”
The LSE’s move also reflects a broader strategy to retain fast-growing tech firms that might otherwise seek US listings. By enabling private trading in the UK, regulators hope to delay—or even replace—the need for IPOs, which have become less appealing due to high costs and regulatory burdens.
Banks Push Back
Banks are not giving up ground easily. They are lobbying to retain their role in pricing, matchmaking, and clearing trades. Many argue that exchanges lack the bespoke, client-first approach that private markets require.
“There is a huge difference between matching trades and understanding the complex needs of a growing business,” said a managing director at a top UK investment bank. “We’ve been doing this for decades. Exchanges are stepping into territory they don’t fully understand.”
To counter the influence of exchanges, some banks are exploring the idea of launching their own private trading platforms or forming alliances with fintech firms to offer more flexible services.
What This Means for Startups and Investors
For private companies, this turf war could result in more options, better pricing, and faster access to liquidity. Startups may no longer feel pressured to go public too soon or seek capital overseas. At the same time, institutional investors will gain more reliable access to shares in promising firms without waiting for IPOs.
However, the success of the platform will depend on regulatory clarity and whether the competing factions—banks, exchanges, and fintech firms—can collaborate to create a seamless experience.
“We want to see a well-functioning private market ecosystem,” said a spokesperson from the Financial Conduct Authority (FCA). “But innovation must not come at the cost of market integrity.”
The Bigger Picture
This battle is just one part of a broader transformation in how companies raise capital and how markets evolve. As technology reshapes financial services, traditional roles are being questioned, and new partnerships are emerging.
Whether banks or exchanges come out on top, one thing is clear: the UK’s financial system is entering a new era—one where private markets are no longer out of reach for mainstream investors.
