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FCA AI Supervision: What The Regulator's Agentic First Responder Means For UK Firms

FCA AI supervision is moving from plan to practice. On 22 September 2026 the FCA's chief executive, Nikhil Rathi, said the regulator is already exploring agentic AI as its “first responder” to speed up monitoring of wholesale markets across more than 9,000 firms. On 14 October its Market Watch 86 showed what supervisors find when they test firms' surveillance. For UK firms, the practical consequence is that the data you send and the controls behind it will be read faster, so errors will surface sooner.

Published  ·  Updated  ·  6 min read  ·  By BraivIQ Editorial

A trading app on a phone in a dark room, for an article on FCA AI supervision and what it means for UK firms

Key takeaways

  • On 22 September 2026 Nikhil Rathi said the FCA is already exploring agentic AI as its first responder for monitoring wholesale markets, overseeing more than 9,000 firms.
  • Rathi said the FCA works with a billion rows of data per day alongside supervisory judgement.
  • Market Watch 86, published on 14 October 2026, found brokers relying on vendor default settings and thresholds that left client trades unmonitored.
  • Faster supervision means data errors and weak controls are likely to surface sooner. Check what you send before you send it.

FCA AI supervision means the regulator using AI, including agents, to monitor markets and firms. The FCA first described agentic AI as a possible “first responder” in a June 2026 speech. On 22 September 2026 its chief executive said the regulator is “already exploring” it, which suggests the work has moved on. For firms the implication is simple: what you report is going to be read more quickly and more completely.

What did the FCA say about AI supervision?

Speaking on 22 September 2026 in a speech published on 23 September, Nikhil Rathi said: “We are already exploring agentic AI as our ‘first responder’ to speed up how we monitor wholesale markets, overseeing more than 9000 firms.” Rathi said the FCA is using technology and its large data sets, “a billion rows of data per day”, alongside supervisory judgement to tackle market abuse faster.

What does Market Watch 86 show about FCA supervision?

Market Watch 86, published on 14 October 2026, reported on visits to 7 retail brokers. The FCA said some “appeared to rely on out-of-the-box settings provided by third-party vendors” and some “mistakenly assumed that having an alert in place was evidence of an effective control”. It found thresholds set so that client trades were not monitored. A day earlier, on 13 October, the FCA announced three arrests in an operation against an insider dealing ring.

What does FCA AI supervision mean for UK firms?

  • **Report quality shows faster.** If supervisors can scan every report, a recurring error is less likely to sit unnoticed for years.
  • **Settings need evidence.** Market Watch 86 shows supervisors ask whether surveillance settings were tested, not only whether alerts exist.
  • **Records matter.** Be ready to show who checked a report or changed a setting, and why.

How should firms prepare?

Check your reports against your own records before submission, and test surveillance settings on cases with known answers. Our article on transaction reporting and Market Watch 86 covers the broker side, and technical teams can read our playbook on testing surveillance thresholds. Our case studies include surveillance for a global investment bank, where people made the call on what each alert meant. Our AI Automation London team can show the approach in a 14-day Proof Run.

Frequently asked questions

Does the FCA use AI to supervise firms?

The FCA says it is exploring it. On 22 September 2026 its chief executive said it is already exploring agentic AI as its first responder to speed up monitoring of wholesale markets, and that it works with a billion rows of data per day.

What is the FCA's first responder?

It is the FCA's description of agentic AI that could act first in monitoring wholesale markets, alongside supervisory judgement. The FCA has not published details of how it works.

What should firms do about FCA AI supervision?

Make sure the data you report is checked before submission and that your controls, such as surveillance settings, are tested and documented. Faster supervision makes errors more likely to surface.

References

  1. Financial Conduct Authority, "Building next-generation market infrastructure (speech by Nikhil Rathi)", 23 September 2026. https://www.fca.org.uk/news/speeches/building-next-generation-market-infrastructure
  2. Financial Conduct Authority, "Market Watch 86", 14 October 2026. https://www.fca.org.uk/publications/newsletters/market-watch-86
  3. Financial Conduct Authority, "Three arrests in major FCA operation against criminal insider dealing ring", 13 October 2026. https://www.fca.org.uk/news/press-releases/three-arrests-major-fca-operation-against-criminal-insider-dealing-ring
  4. Financial Conduct Authority, "Rethinking regulation in the age of AI (speech)", 24 June 2026. https://www.fca.org.uk/news/speeches/rethinking-regulation-age-ai