FCA Rule Review: What The Regulator's Simplification Drive Means For Firms Adopting AI

An FCA rule review is the regulator checking whether its existing rules still work, and updating, simplifying or removing them where they do not. The FCA's blog of 5 November 2026 set out how it does this and listed recent changes. For firms adopting AI, the message is that the FCA is looking at outcomes and evidence rather than paperwork, which puts the quality of your own records in focus.

What did the FCA say on 5 November?

The FCA said markets, consumer behaviour and technology change, so rules that were right when introduced may need to be updated, simplified or removed. It reviews rules under its Rule Review Framework using evidence assessments, post-implementation reviews and impact evaluations, and also learns through supervision, data monitoring, market studies and calls for evidence.

• **SM&CR.** The FCA said it completed the first phase of reforms to the Senior Managers and Certification Regime in 2026, with broader reforms possible once new legislation is finalised.
• **Transaction reporting.** It pointed to changes announced in August 2026 that reduce reporting fields and remove some obligations, expected to save firms more than £100m a year.
• **Moving rules into the Handbook.** As more rules move into the FCA Handbook, it is revisiting requirements and looking at where it can rely less on prescriptive rules.

The blog also listed recent evaluations, including of the 2019 overdrafts intervention and the 2020 ban on contingent charging in pensions, and said an evaluation of the 2018 persistent debt interventions is in progress and will be published soon. Formal reviews are only one source. The FCA said it also learns through supervision, data monitoring, market studies and calls for evidence, so what firms tell it can shape later changes.

What does the FCA rule review mean for firms adopting AI?

Fewer prescriptive rules mean more judgement, and judgement needs evidence. If a firm uses an AI tool to prepare a reconciliation or a report, the question a supervisor asks is the same as for any process: who decided, on what evidence, and can you show it? Our article on SM&CR reform covers the accountability side.

• **Track rule changes.** Keep a list of FCA changes that affect your processes, with the date each takes effect.
• **Keep sign-off records.** Who approved what, when and with what evidence.
• **Measure outcomes.** Errors, rework and time saved, recorded month by month.

Changes from the FCA blog of 5 November 2026. The records column is illustrative.

Change	What it means for firms	Record worth keeping
SM&CR reform, first phase completed in 2026	Clear senior manager responsibilities	Who owns each process, including AI-assisted work
Transaction reporting changes, August 2026	Fewer reporting fields and some obligations removed	Which fields changed and when your reports were updated
Rules moving into the FCA Handbook	Less reliance on prescriptive rules	How your firm meets the outcome, with evidence

How can automation help with regulatory change?

Reading regulator publications, matching them to your policies and noting deadlines is preparation work. In our Desk Twin, the /reg shortcut prepares a digest of new publications with links for a person to review. Our transaction report checks workflow does the same for reports: the agent compares and explains, and a person approves every correction and the submission. Our earlier article on regulatory reporting automation covers the August changes.

Where should a firm start?

List the FCA changes from the last six months that touch your processes, and check that each one has an owner and a date. A 14-day Proof Run can show which parts of that tracking can be prepared automatically. This article summarises an FCA publication and is not regulatory advice.