Financial Conduct Authority (FCA) Chief Executive Nikhil Rathi signaled more intensive intervention against risks across the financial system, using existing powers, technology and intelligence rather than relying principally on new rules. Speaking at the Corporation of the City of London’s annual City Dinner, he warned that regulatory and legislative processes are lagging technological change, while artificial intelligence (AI), continuous trading and parallel market structures amplify market abuse, concentration and financial crime risks. The message builds on the FCA’s recent emphasis on moving beyond peak rulemaking toward assessing regulatory outcomes, without slowing reform or intervention. Rathi outlined a broader approach to using existing powers where significant harm affects markets within the FCA’s remit, even when its source lies outside the firms it directly regulates. Decisions would turn on available powers, resource priorities and cooperation with other agencies. Internally, AI tools can assess cases, combine returns with intelligence and identify concerning information, leaving supervisors to judge issues such as when coordination between AI agents becomes market manipulation. He also emphasized investment in recovery from cyber incidents because prevention cannot always succeed. The operational agenda includes reducing duplicative assurance and improving the detection of money laundering. Deputy Chief Executive Sarah Pritchard will engage with industry on unnecessary compliance effort and consider whether the three lines of defence model needs revisiting. As the FCA integrates more than 60,000 professional services businesses into its remit, Chief Operating Officer Johan Sekora will lead work looking beyond know your customer processes to identify actual money laundering. Information from customer checks, transaction monitoring and sanctions monitoring will remain valuable, with experimentation aimed at directing resources toward identifiable risks.
United Kingdom’s Financial Conduct Authority signals stronger use of existing powers and technology to tackle market integrity risks
Financial Conduct Authority Chief Executive Nikhil Rathi used a speech at the City of London’s annual City Dinner to signal more intensive action against market integrity risks through existing powers, AI and intelligence sharing. The approach includes tackling harm originating outside directly regulated firms where it affects markets within the FCA’s remit. Planned work will address duplicative compliance assurance and improve money laundering detection as more than 60,000 professional services businesses enter its remit.