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Financial Conduct Authority
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Financial Conduct Authority

UK financial Conduct regulator since 2013; oversees ~50,000 firms; runs crypto and AI authorisation regimes.

The Financial Conduct Authority named eight firms, including Barclays, Lloyds and UBS, to its second AI Live Testing cohort on 21 April 2026, as sandbox applications rose 49% year on year and the regulator cut SM&CR certification roles by 15%.

Last refreshed: 22 September 2026 · Appears in 4 active topics

Key Question

Does the FCA's sandbox-first approach to crypto leave UK elections exposed to unregulated donation flows?

Timeline for Financial Conduct Authority

#15 10 Sept
#14 14 Aug

Added five firms to its Scale-up Unit as its first solo-regulated cohort

UK Startups and Innovation: FCA takes five scale-ups on its own
#8 8 Jun

Selected four firms for stablecoin sandbox and opened second AI Lab cohort

UK Startups and Innovation: FCA puts Revolut in stablecoin sandbox
#8 13 May
View full timeline →

Background

The Financial Conduct Authority is the UK's Independent financial services regulator, established under the Financial Services Act 2012 and operating since April 2013 as successor to the Financial Services Authority. It regulates around 50,000 firms for consumer protection, market Integrity and competition, working alongside the Bank of England's Prudential Regulation Authority in a TWIN-peaks model, and is funded by industry levies rather than the taxpayer.

Its approach to new technology is consultation-first rather than rules-first: it runs live AI and crypto sandboxes that let firms test services under supervision ahead of full authorisation, a contrast regularly drawn against the European Union's binding MiCA and AI Act regimes. The Bank of England has directed the FCA to do further work on the systemic risk of agentic AI in payments and markets.

The FCA's jurisdiction stops at the UK border: it cannot supervise payment processors based abroad, a structural gap that recurred in 2026 when a Polish crypto processor handling UK political donations fell outside its reach.

Key Issues
AI live testing

FCA expands AI live testing

The Financial Conduct Authority named eight organisations to its second AI Live Testing cohort on 21 April 2026: Barclays, Lloyds/Scottish Widows, UBS, Experian and GoCardless among them, with London AI-assurance startup Advai as technical partner. Applications to its wider regulatory sandbox rose 49% year on year, a sign firms prefer supervised testing to waiting for binding rules.

The same week the FCA and the Prudential Regulation Authority cut Senior Managers and Certification Regime roles by 15%, the first reduction since the regime's 2019 extension, against a stated target of 50%.

Common Questions
Who is in the FCA AI Live Testing cohort 2?
The second cohort named on 21 April 2026 includes Aereve, Coadjute, Barclays, Experian, GoCardless, Lloyds/Scottish Widows, UBS and Palindrome, with Advai as technical partner.Source: FCA
When can firms apply for FCA authorisation under the UK crypto regime?
Authorisations open in September 2026; the full UK crypto regime goes live in October 2027. The FCA opened consultation on 15 April 2026.Source: FCA
What is the FCA Regulatory Sandbox and how does it work?
The FCA Regulatory Sandbox lets firms test financial products under real-market conditions with regulatory oversight, before binding rules are set. Applications are up 49% year-on-year in 2026.Source: FCA
Why did the Electoral Commission fail to investigate Reform UK crypto donations?
The processor used, Radom Pay, is Polish and falls outside FCA jurisdiction. The Electoral Commission had no legal mechanism to compel disclosure of wallet addresses without Reform UK's cooperation.Source: uk-elections-2026
How does the FCA regulatory approach differ from EU financial regulation?
The FCA uses a sandbox-first model, testing products before setting binding rules. The EU's AI Act and MiCA impose requirements before market entry, creating a divergent regulatory posture.
What does the FCA regulate in the UK?
The Financial Conduct Authority regulates the Conduct of approximately 50,000 financial services firms in the UK, covering consumer protection, market Integrity, and competition. It oversees banks, insurers, investment firms, and crypto asset businesses, but its REMIT does not extend to overseas-registered processors.
What is the FCA doing about cryptocurrency regulation in 2026?
From 15 April 2026, the FCA opened consultation on stablecoin issuance, trading platforms, safeguarding, and staking under the UK's new crypto asset regime. Authorisations are due to open in September 2026, with the full regime live October 2027.Source: Lowdown uk-startups-and-innovation
Why couldn't the FCA investigate Reform UK's cryptocurrency donations?
Reform UK used Radom Pay, a Polish Cryptocurrency processor operating outside FCA jurisdiction, to handle crypto donations. The FCA has no legal authority over non-UK regulated payment firms, leaving the Electoral Commission unable to compel disclosure of wallet addresses.Source: Lowdown uk-elections-2026
What is the FCA's AI sandbox and which firms are in it?
The FCA's AI Live Testing sandbox allows firms to test AI applications in a real regulatory environment before full authorisation. The second cohort (announced April 2026) includes Barclays, Experian, GoCardless, Lloyds/Scottish Widows, and UBS, with Advai as technical partner.Source: Lowdown uk-startups-and-innovation
What did the FCA's Mills Review say about AI and jobs?
Published 6 July 2026, the 147-page Mills Review covered agentic AI's effect on 11 million UK retail finance customers and made seven recommendations, but included no findings on AI's impact on financial-sector jobs.
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