{
 "publisher": "Automated Compliance Ltd",
 "site": "https://compliancemonitoring.co.uk",
 "licence": "Free to use with attribution and a link to the page cited. Information, not advice.",
 "handbook_mirror": {
  "provisions": "27,169",
  "sourcebooks": "63",
  "synced": "2026-10-12"
 },
 "generated": "2026-10-26",
 "updates": [
  {
   "slug": "ai-in-uk-financial-services-2026-survey",
   "url": "https://compliancemonitoring.co.uk/updates/2026/10/ai-in-uk-financial-services-2026-survey",
   "title": "AI survey 2026: 86% of firms use AI, but monitoring after deployment lags",
   "date": "2026-10-26",
   "source_type": "Bank of England and FCA survey",
   "summary": "The Bank of England and FCA's fourth survey of AI in UK financial services finds adoption, agents and third-party AI all up. Controls before deployment are near-universal; ongoing monitoring is reported by around half of respondents.",
   "applies": [
    "All firms using AI",
    "SM&CR firms"
   ],
   "refs": [
    {
     "ref": "PRIN 2A.9.10R",
     "kind": "provision",
     "type": "Rule",
     "provision_date": "2023-07-31",
     "text": "The firm’s monitoring must also enable it to identify: (1) whether the firm is complying with Principle 12 and the cross-cutting obligations in PRIN 2A.2; (2) whether for any product the firm manufactures or distributes, any group of retail customers is experiencing different outcomes compared to another group of retail customers of the same product; and (3) whether any retail customers have suffered harm as a result of the firm’s acts or omissions.",
     "link": "https://www.handbook.fca.org.uk/handbook/prin2a"
    },
    {
     "ref": "COCON 2.2.1R",
     "kind": "provision",
     "type": "Rule",
     "provision_date": "2016-03-07",
     "text": "SC1: You must take reasonable steps to ensure that the business of the firm for which you are responsible is controlled effectively.",
     "link": "https://www.handbook.fca.org.uk/handbook/cocon2"
    }
   ],
   "body": [
    {
     "heading": "What the survey found",
     "text": "The survey, published on 26 October 2026, had 196 respondents: 101 larger firms and 95 smaller firms . Among them:\n- 86% reported using AI, up from 75% in 2024. Generative AI made up 56% of all reported AI systems.\n- 80% reported having AI agents deployed, and a further 14% planned to deploy them within 12 months. Most agents support decisions rather than make them: only 2% reported agents with broad autonomy.\n- Third-party implementations were 39% of all reported AI systems and 53% of high-materiality ones, up from 35% in 2024.\n- 94% reported firmwide AI policies, principles or standards, and 84% reported centralised AI or model-risk governance fora.\n- Human approval, pre-deployment review and vendor due diligence were each reported by more than 90%. Ongoing monitoring, leakage testing and periodic review or recertification were each reported by around half.\n- For third-party high-materiality systems, 81% relied on vendor assurance and contractual arrangements; 24% reported deep knowledge of those systems, against 77% for systems built internally.\n- 73% of small firms reported using AI."
    },
    {
     "heading": "What to do",
     "text": "- Keep an inventory of every AI system and agent you use, including the AI inside third-party software, with a materiality rating for each.\n- Add controls after deployment: outcomes monitoring that can show whether any group of customers does worse because of a model (PRIN 2A.9.10R), leakage testing, and a date for each system's next review.\n- For each third-party system, decide what you would need to know to explain an outcome to the FCA, and put it in the contract rather than relying on assurance alone.\n- Name the senior manager responsible for each material system and record the steps they take (COCON 2.2.1R)."
    },
    {
     "heading": "Our view",
     "text": "The gap the survey shows is not policy, which almost every respondent has, but evidence after go-live. A firm that can show its pre-deployment review but not how the system has behaved since is describing intent, not control. Monitoring is where the Consumer Duty and SM&CR questions will land."
    }
   ],
   "sources": [
    {
     "title": "Bank of England and FCA: Artificial intelligence in UK financial services 2026",
     "url": "https://www.bankofengland.co.uk/report/2026/artificial-intelligence-in-uk-financial-services-2026"
    }
   ],
   "produced": "drafted from the source and the FCA Handbook mirror, reviewed before publication"
  },
  {
   "slug": "ai-good-and-poor-practice",
   "url": "https://compliancemonitoring.co.uk/updates/2026/10/ai-good-and-poor-practice",
   "title": "AI in financial services: the FCA's good and poor practice adds no new rules",
   "date": "2026-10-19",
   "source_type": "FCA good and poor practice",
   "summary": "The FCA's review of AI in retail financial services sets out good and poor practice in three areas and says plainly that it does not create new requirements. The Consumer Duty and SM&CR carry the weight.",
   "applies": [
    "All firms using AI with retail customers",
    "SM&CR firms"
   ],
   "refs": [
    {
     "ref": "PRIN 2A.9.9R",
     "kind": "provision",
     "type": "Rule",
     "provision_date": "2023-07-31",
     "text": "The monitoring carried out by a firm must enable it to determine at least: (1) whether retail customers are being, or have been, sold products that have been designed to meet their needs, characteristics and objectives; (2) whether the products that retail customers purchase provide fair value and appropriate action has been taken to address products identified as not providing fair value; (3) whether retail customers are equipped with the right information to make effective, timely and properly informed decisions; and (4) whether retail customers receive the support they need.",
     "link": "https://www.handbook.fca.org.uk/handbook/prin2a"
    },
    {
     "ref": "PRIN 2A.8.4R",
     "kind": "provision",
     "type": "Rule",
     "provision_date": "2026-06-26",
     "text": "At least annually, the governing body of a firm must: (1) review and approve the firm’s report on the outcomes being received by retail customers; (2) confirm whether it is satisfied that the firm is complying with its obligations under the Consumer Duty; and (3) assess whether the firm’s future business strategy is consistent with its obligations under the Consumer Duty.",
     "link": "https://www.handbook.fca.org.uk/handbook/prin2a"
    }
   ],
   "body": [
    {
     "heading": "What was published",
     "text": "On 19 October 2026 the FCA published good and poor practice on AI in financial services in three chapters: Consumer Duty and vulnerability; governance and accountability; and operational resilience. It states that the material does “not create new requirements” . It follows the Mills Review of 6 July 2026, which made seven recommendations ."
    },
    {
     "heading": "What to do",
     "text": "- List the decisions in your customer journey where a model, scorecard or AI tool makes or shapes the outcome.\n- For each, show how your outcomes monitoring under PRIN 2A.9.9R would detect a group of customers doing worse because of it.\n- Name the senior manager who owns each one, and record the oversight in the evidence your governing body reviews under PRIN 2A.8.4R."
    },
    {
     "heading": "Our view",
     "text": "No new rules means no new excuses. The questions a supervisor will ask about an AI-driven decision are the questions the Duty already asks of any decision: who it affects, how you know the outcome is good, and who is accountable. Firms that can answer those for their human processes can extend the same file to their models."
    }
   ],
   "sources": [
    {
     "title": "FCA good and poor practice: AI in financial services",
     "url": "https://www.fca.org.uk/publications/good-poor-practice/ai-financial-services"
    },
    {
     "title": "FCA press release: review of AI in retail financial services",
     "url": "https://www.fca.org.uk/news/press-releases/fca-publishes-landmark-review-impact-ai-retail-financial-services"
    }
   ],
   "produced": "drafted from the source and the FCA Handbook mirror, reviewed before publication"
  },
  {
   "slug": "handbook-sync-34-chapters",
   "url": "https://compliancemonitoring.co.uk/updates/2026/10/handbook-sync-34-chapters",
   "title": "Handbook sync: 34 chapters changed, including DISP 3, SUP 16, FEES and a new PERG 18",
   "date": "2026-10-12",
   "source_type": "Handbook sync",
   "summary": "Our mirror of the FCA Handbook was re-synced from the FCA's API on 12 October 2026. Thirty-four chapters had changed since the previous sync.",
   "applies": [
    "Complaints teams",
    "Every firm that files returns",
    "Cryptoasset firms"
   ],
   "refs": [
    {
     "ref": "DISP 3.3.4CR",
     "kind": "provision",
     "type": "Rule",
     "provision_date": "2026-10-01",
     "text": "The Ombudsman may dismiss a complaint referred to the Financial Ombudsman Service on or after 1 October 2026 without considering its merits if the Ombudsman considers that: (1) the complaint is frivolous or vexatious; or (2) the complainant has acted vexatiously, abusively or otherwise unreasonably in engaging with the Financial Ombudsman Service; or (3) the respondent has reviewed the subject matter of the complaint in accordance with:(a) the regulatory standards for the review of such transactions prevailing at the time of the review; or (b) any formal regulatory requirement, standard or guidance published by the FCA or other regulator in respect of that type of complaint; (including, if appropriate, making an offer of redress to the complainant), unless the Ombudsman considers that the respondent did not address the particular circumstances of the case; or (4) the respondent has reviewed the subject matter of the complaint and issued a redress determination in accordance with the terms of a consumer redress scheme; or (5) the subject matter of the complaint has previously been considered or excluded under the Financial Ombudsman Service (unless the Ombudsman considers that mater",
     "link": "https://www.handbook.fca.org.uk/handbook/disp3"
    },
    {
     "ref": "PERG 18",
     "kind": "chapter",
     "type": null,
     "provision_date": null,
     "text": "PERG 18 Guidance on regulated cryptoasset activities",
     "link": "https://www.handbook.fca.org.uk/handbook/perg18"
    }
   ],
   "body": [
    {
     "heading": "What changed",
     "text": "Thirty-four chapters changed. They include DISP 3, where the Financial Ombudsman's new dismissal grounds now sit (DISP 3.3.4CR); SUP 16 on reporting; FEES; and a new chapter, PERG 18, the perimeter guidance on cryptoasset activities."
    },
    {
     "heading": "What to do",
     "text": "- Complaints teams: read the new dismissal grounds and decide how a referral that may fall under one is recorded.\n- Firms that report: check any SUP 16 return you prepare against the current text, not last quarter's template.\n- Firms with cryptoasset activity: read PERG 18 before the authorisation gateway closes on 28 February 2027 ."
    },
    {
     "heading": "Our view",
     "text": "A month of Handbook changes is too much to read cover to cover and too important to skip. Knowing which chapters moved is the first filter; knowing which of your controls cite them is the second. That second step is what Guardian's “rule changes to assess” tile does."
    }
   ],
   "sources": [
    {
     "title": "FCA: how the cryptoasset gateway will operate",
     "url": "https://www.fca.org.uk/firms/new-regime-cryptoasset-regulation/how-gateway-will-operate"
    }
   ],
   "produced": "drafted from the source and the FCA Handbook mirror, reviewed before publication"
  },
  {
   "slug": "ombudsman-dismissal-grounds",
   "url": "https://compliancemonitoring.co.uk/updates/2026/10/ombudsman-dismissal-grounds",
   "title": "The Financial Ombudsman's new dismissal grounds apply from 1 October 2026",
   "date": "2026-10-01",
   "source_type": "Handbook change",
   "summary": "For complaints referred on or after 1 October 2026, the Ombudsman may dismiss a complaint without considering its merits on the grounds now set out in DISP 3.3.4CR.",
   "applies": [
    "Every firm that handles complaints"
   ],
   "refs": [
    {
     "ref": "DISP 3.3.4CR",
     "kind": "provision",
     "type": "Rule",
     "provision_date": "2026-10-01",
     "text": "The Ombudsman may dismiss a complaint referred to the Financial Ombudsman Service on or after 1 October 2026 without considering its merits if the Ombudsman considers that: (1) the complaint is frivolous or vexatious; or (2) the complainant has acted vexatiously, abusively or otherwise unreasonably in engaging with the Financial Ombudsman Service; or (3) the respondent has reviewed the subject matter of the complaint in accordance with:(a) the regulatory standards for the review of such transactions prevailing at the time of the review; or (b) any formal regulatory requirement, standard or guidance published by the FCA or other regulator in respect of that type of complaint; (including, if appropriate, making an offer of redress to the complainant), unless the Ombudsman considers that the respondent did not address the particular circumstances of the case; or (4) the respondent has reviewed the subject matter of the complaint and issued a redress determination in accordance with the terms of a consumer redress scheme; or (5) the subject matter of the complaint has previously been considered or excluded under the Financial Ombudsman Service (unless the Ombudsman considers that mater",
     "link": "https://www.handbook.fca.org.uk/handbook/disp3"
    },
    {
     "ref": "DISP 3.3.4DG",
     "kind": "provision",
     "type": "Guidance",
     "provision_date": "2026-10-01",
     "text": "Examples of other compelling reasons why it would be inappropriate for the complaint to be dealt with under the Financial Ombudsman Service may include (but are not limited to): (1) the complainant has not suffered (or is unlikely to suffer) financial loss, material distress or material inconvenience; or (2) the complaint clearly does not have any reasonable prospect of success; or (3) the respondent has already made an offer of compensation (or a goodwill payment) which is:(a) fair and reasonable in relation to the circumstances alleged by the complainant; and (b) still open for acceptance; or (4) with knowledge of the right to refer a complaint to the Financial Ombudsman Service, the complainant has already concluded a full and final settlement with the respondent regarding the subject matter of the complaint; or (5) the Ombudsman considers that the complaint is about the legitimate exercise of a respondent’s commercial judgment; or (6) the compensation sought under the complaint would significantly exceed the award limit in DISP 3.7.4R.",
     "link": "https://www.handbook.fca.org.uk/handbook/disp3"
    },
    {
     "ref": "DISP 1.6.2R",
     "kind": "provision",
     "type": "Rule",
     "provision_date": "2019-07-12",
     "text": "Subject to DISP 1.6.2AR, the respondent must, by the end of eight weeks after its receipt of the complaint, send the complainant: (1) a 'final response', being a written response from the respondent which: (a) accepts the complaint and, where appropriate, offers redress or remedial action; or (b) offers redress or remedial action without accepting the complaint; or (c) rejects the complaint and gives reasons for doing so; and which: (d) encloses a copy of the Financial Ombudsman Service's standard explanatory leaflet; (da) provides the website address of the Financial Ombudsman Service; (e) informs the complainant that if he remains dissatisfied with the respondent's response, he may now refer his complaint to the Financial Ombudsman Service; and (f) indicates whether or not the respondent consents to waive the relevant time limits in DISP 2.8.2 R or DISP 2.8.7 R (Was the complaint referred to the Financial Ombudsman Service in time?) by including the appropriate wording set out in DISP 1 Annex 3R; or [Note: respondents are reminded of their obligations under regulation 19 of the ADR Regulations, which requires respondents to provide equivalent messaging in respect of the time limi",
     "link": "https://www.handbook.fca.org.uk/handbook/disp1"
    }
   ],
   "body": [
    {
     "heading": "What changed",
     "text": "DISP 3.3.4CR lets the Ombudsman dismiss a complaint referred on or after 1 October 2026 without considering its merits, on grounds that include vexatious conduct, a prior review under regulatory standards and matters better suited to a court . It follows the joint FCA and Ombudsman consultation CP26/9 and the Ombudsman's own policy statement . Guidance sits alongside it in DISP 3.3.4DG."
    },
    {
     "heading": "What to do",
     "text": "- Nothing changes in your own clock: the final response is still due within eight weeks of receipt (DISP 1.6.2R).\n- Where you think a referred complaint falls under a dismissal ground, say so to the Ombudsman with the evidence, early.\n- Record the outcome against the complaint so your root-cause analysis can see which grounds are being used."
    },
    {
     "heading": "Our view",
     "text": "The new grounds are a tool for the Ombudsman, not a defence for firms. A firm that relies on them without having handled the complaint well first will find the merits looked at anyway. The firms that benefit are the ones whose file already shows the complaint was handled fairly."
    }
   ],
   "sources": [
    {
     "title": "FCA Handbook, DISP 3.3",
     "url": "https://handbook.fca.org.uk/handbook/disp3/disp3s3"
    },
    {
     "title": "FCA CP26/9 modernising the redress system",
     "url": "https://www.fca.org.uk/publications/consultation-papers/cp26-9-modernising-redress-system"
    },
    {
     "title": "Financial Ombudsman: modernising the redress system",
     "url": "https://www.financial-ombudsman.org.uk/who-we-are/governance-funding/modernising-redress-system"
    }
   ],
   "produced": "drafted from the source and the FCA Handbook mirror, reviewed before publication"
  }
 ]
}