Daily · FCA AI Supervision and CFTC Swap Definition · October 19, 2026

Key points

FCA integrates Mills Review recommendations into AI supervision

Jessica Rusu, the FCA's chief data, information and intelligence officer, announced that the regulator is embedding 6 of the 7 recommendations from the Mills Review into live work immediately. The Mills Review, commissioned by the FCA and published in July, focused on how artificial intelligence could reshape retail financial services by 2030. Rusu noted that developments anticipated by the review are already emerging, including the transition towards agentic finance, exemplified by the launch of Meta's Muse.

The FCA's response to these developments involves testing, assurance, monitoring, and surveillance conducted directly with industry to understand how AI systems are being deployed. The regulator stated that its innovation services, such as the AI Lab, provide direct insight into what firms are building, including agent-led payments, fraud detection, and consumer support. Additionally, the FCA is working directly with banks to understand how frontier models are changing cyber defence, specifically in identifying and linking vulnerabilities and assisting with triaging, patching, and recovering at greater speed.

Rusu highlighted that consumers are increasingly turning to general-purpose large language models (LLMs), such as ChatGPT, Gemini, and Claude, for financial information and advice. Regulated firms are beginning to integrate their services into these AI platforms. This shift suggests that the FCA is moving from a reactive stance to an active supervisory model where it monitors the integration of frontier models and consumer-facing LLMs in real-time.

CFTC expands swap definition to include event contracts

The Commodity Futures Trading Commission (CFTC) adopted an interim final rule codifying its longstanding position that casino-style gambling products are excluded from the "swap" definition. This exclusion covers wagers placed on sportsbooks and casino games. Simultaneously, the CFTC proposed to further define the term "swap" to explicitly include event contracts. The proposal covers event contracts based on sports-, politics-, cultural-, and weather-related events.

Bringing event contracts under CFTC swap jurisdiction would subject prediction markets and similar products to federal derivatives regulation. This distinction clarifies the regulatory boundary between traditional gambling, which remains outside the swap definition, and event contracts, which are now proposed to be included.

Options market fee amendments filed with immediate effectiveness

Nasdaq PHLX LLC filed a proposed rule change to amend the PHLX Pricing Schedule at Options 7, Section 4 (Multiply Listed Options Fees), which was granted immediate effectiveness. Similarly, The Nasdaq Stock Market LLC filed a proposed rule change to amend the Exchange's Rules at Options 7, Section 2, also granted immediate effectiveness.

BOX Exchange LLC filed a proposed rule change with immediate effectiveness to amend the fee schedule for trading on the BOX Options Market LLC facility. This change amends Section V (Manual Transaction Fees) by increasing QOO and FOO order fees in non-penny interval classes and increasing the floor broker enhanced rebate in non-penny interval classes.

CFTC seeks comment on Part 40 information collection renewal

The CFTC announced a public comment opportunity on the proposed renewal of information collection 3038-0093, which concerns Part 40 (Provisions Common to Registered Entities). Under the Paperwork Reduction Act, federal agencies are required to publish notice in the Federal Register concerning each proposed collection of information. The agency allows 60 days for public comment on these proposed collections.

Our read

The FCA's explicit commitment to embedding Mills Review recommendations signals a shift toward active, real-time supervision of AI integration in financial services. Firms should anticipate increased scrutiny on agentic finance and LLM integrations, with the regulator leveraging its AI Lab for direct insight into firm deployments. The CFTC's move to include event contracts in the swap definition while excluding casino-style gambling creates a clearer regulatory perimeter for prediction markets, potentially subjecting them to federal derivatives oversight. Meanwhile, the immediate effectiveness of various options fee amendments indicates ongoing adjustments to trading cost structures across US exchanges.

This digest was produced automatically by a large-language-model system from the regulator publications and official sources listed below; it is AI-generated content and may contain inaccuracies. It is not legal advice — verify wording and deadlines against the original documents.

Sources