UK regulator FCA proposed direct regulation of ChatGPT, Claude and Gemini

Sheldon Mills, Chief Executive of the UK Financial Conduct Authority (FCA), called on July 7, 2026 for the country to seriously consider direct regulation of major language models — ChatGPT from OpenAI, Claude from Anthropic, and Gemini from Google. According to him, these systems have an increasingly large impact on the financial decisions of ordinary consumers, and the regulatory framework created before the emergence of generative AI needs serious updating.

Why the financial regulator is looking at language models

The FCA is the UK's primary financial regulator. The agency licenses and oversees tens of thousands of market participants: banks, insurance companies, investment platforms, and retail brokers. Any organization providing financial advice to British citizens must comply with its requirements.

Mills, who is responsible for competition and consumer protection at the FCA, pointed out a fundamental gap: language models de facto perform the functions of financial advisors for millions of people, but de jure they are not and do not fall under FCA regulation. When a consumer asks ChatGPT whether to take out a mortgage now, or asks Gemini to select an investment portfolio based on their risk profile — nobody is legally responsible for the quality of that answer.

Unlike a bank or licensed advisor, an AI company is not obligated to check the suitability of a recommendation for a specific client, disclose conflicts of interest, or compensate for damage from incorrect advice. This very disproportion is what Mills called a problem requiring regulatory response.

What will change if the FCA introduces direct regulation

Direct supervision of language models by the financial regulator would be a precedent on a global scale. Currently, the FCA controls financial products and services, but not technologies as such. If the agency extends oversight to LLMs, Anthropic, OpenAI, and Google will for the first time come under the direct impact of British financial legislation.

Possible consequences for AI companies:

• Obligation to disclose how their models form answers to financial queries
• Warning users that the LLM is not a licensed financial advisor
• Auditing answers for compliance with consumer protection standards
• Restrictions or licensing for personalized investment recommendations

This is not about banning AI in the financial sector, but about extending to it the principles of transparency and accountability that are mandatory for traditional market participants.

Mills emphasized that the regulatory framework should evolve as companies increasingly rely on AI tools in their work with customers. For comparison: the EU, under the EU AI Act adopted in 2024, has already classified high-risk applications of AI in lending and insurance as requiring expanded oversight. After Brexit, the UK developed a more flexible regulatory model — Mills' rhetoric points to a possible shift.

What this means

The public raising of this issue by a key FCA official is a significant signal: the discussion of direct oversight of LLMs in finance has moved out of the academic realm and onto the level of practical regulatory agenda. If the UK is the first among major jurisdictions to introduce specific requirements for language models in financial scenarios, this will set a precedent and put pressure on regulators in the US, EU, and other markets. AI companies whose products are widely used in financial contexts should already be carefully monitoring the development of the UK regulatory agenda.