April 6 Is Three Days Away. Your AI Doesn't Know That Yet.

UK financial services firms are under pressure from two directions at once right now. Regulators are raising the bar on what firms must prove they can govern, and AI is changing how firms actually operate. The gap between those two things is where the risk lives.

The FCA, that's the Financial Conduct Authority, the UK's main financial regulator, launched a new disclosure regime this week for a category of products it calls Consumer Composite Investments, or CCIs. This replaces an older EU-derived framework called PRIIPs, Packaged Retail and Insurance-based Investment Products, which was widely criticised for producing disclosures that confused rather than informed retail investors. Under SM&CR, the Senior Managers and Certification Regime, named individuals at your firm are personally accountable for the outcomes these disclosures produce.

The new regime is optional from 6 April but mandatory by June 2027. That sounds gradual. It is not. The FCA is also notifying firms this week that they have been selected for its second AI Live Testing cohort, where selected firms will deploy AI with real consumers under direct regulatory supervision starting late April. The question firms outside that cohort need to ask is this: if the FCA came in tomorrow, could you demonstrate equivalent oversight?

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The CCI Regime Goes Live: The Disclosure Overhaul That Names No Exceptions

From 6 April 2026, the FCA's new Consumer Composite Investments regime is in effect. It replaces the EU's PRIIPs Regulation, which governed how manufacturers and distributors of packaged retail investment products explained those products to consumers. The new CCI framework, set out in Policy Statement PS25/20 published in December 2025, requires firms to produce a new document called a CCI Product Summary. It is shorter, clearer in structure, and built around FCA principles rather than EU templates.

Firms selling products to UK retail investors, including open-ended funds, structured products, insurance-based investment products, and contracts for difference, must now decide whether to use the new CCI Product Summary or continue with the PRIIPs KID until the mandatory switch in June 2027. That choice sounds simple. It is not. Every disclosure document in your distribution chain now has two possible regulatory formats with different standards, and your systems, including the AI ones, need to know which version to produce and when.

The AI governance implication is immediate. Many firms have already deployed AI to generate, populate, or quality-check product disclosure documents. Under SM&CR, the named Senior Manager who owns the distribution or product function carries personal accountability for what those documents contain, regardless of which system produced them. If your AI is generating disclosures that no longer match the regulatory framework in force from April 6, the accountability does not sit with the AI vendor. It sits with the person whose name is on the oversight register.

FCA AI Live Testing Cohort 2: The Regulator Is Now Watching in Real Time

Applications for the FCA's second AI Live Testing cohort closed on 24 March 2026. The FCA is notifying successful firms this week, with live testing commencing in late April. The programme pairs selected firms with the FCA's regulatory team and technical partner Advai to deploy AI systems in real consumer-facing conditions under direct supervisory oversight. It is the most intensive form of AI oversight the FCA has run to date.

The firms selected represent a growing segment of UK financial services that has moved from AI experimentation to live deployment, and the FCA has decided those deployments need watching. Participating firms will be scrutinised across AI governance, risk management, and monitoring frameworks. The FCA is using this cohort to build its own understanding of where the accountability gaps are in live AI systems, so that it can supervise everyone else with greater precision in future.

The harder implication is for firms that are not in the cohort. They are deploying AI in consumer-facing workflows right now, with no equivalent governance structure or regulatory oversight. The FCA's AI Live Testing programme is not just a support service for the firms selected. It is a signal about the standard the FCA expects from all firms deploying AI in live consumer environments. If your firm could not have passed the application threshold for Cohort 2, that gap needs to close before the next supervisory visit, not the next cohort deadline.

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The CCI regime and the AI Live Testing cohort reveal the same gap from two directions. One shows what happens when AI-generated outputs are tied to a regulatory standard that has just changed. The other shows what happens when the regulator starts watching AI in real time. In both cases, the firms most exposed are not the ones that lack the technology.

They are the ones that deployed the technology without building the human infrastructure around it: the named accountabilities, the documented oversight processes, the audit trail that connects AI output to a responsible Senior Manager. A Head of Compliance who cannot say today which SMF holder owns each AI-driven disclosure workflow is not ready for April 6. A Head of AI who cannot demonstrate that their disclosure generation system has been reviewed since the CCI regime went live is carrying personal accountability risk on behalf of someone who may not know they have it.

Which Senior Manager at your firm is named as accountable for the AI systems producing your product disclosures, and have they personally reviewed the outputs since the CCI regime went live on April 6?

If this is a live problem in your organisation, reply to this email. BuildMoat works with UK financial services firms to build the human infrastructure that closes the gap between AI deployment and regulatory accountability.

BuildMoat — buildmoat.co.uk

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