AI Hallucinations Affecting Company Secretaries in international jurisdictions
This page aggregates AI hallucination findings affecting Company Secretaries in international jurisdictions across 2 regulation(s).
Findings overview
| Regulation | Hallucinations | Blind spots | Total |
|---|---|---|---|
| Guidance on Cyber Resilience for Financial Market Infrastructures | 2 | 0 | 2 |
| Principles for Financial Market Infrastructures (PFMI) | 1 | 0 | 1 |
| Total | 3 | 0 | 3 |
Guidance on Cyber Resilience for Financial Market Infrastructures
Hallucinations (2)
Outdated status of 2016 cyber guidance
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AI's failure: AI gave outdated information as if it were current
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Risk for the Company Secretaries: Statutory filing or board pack rests on a procedural requirement that doesn't exist
A Company Secretary who asks an AI tool whether the 2016 CPMI-IOSCO guidance remains the operative standard and receives an unqualified 'yes' may prepare board papers, regulatory gap analyses, or compliance opinions on the premise that the governing framework is stable. As of 6 May 2026, that premise is incorrect: CPMI-IOSCO published a consultative document placing the guidance under active revision, a development the AI failed to surface. Work product issued without disclosing this transitional status exposes the practitioner and their client to the risk of acting on a misrepresented regulatory baseline, with potential consequences for board governance decisions and the client's engagement with the ongoing consultation process.
Active revision not disclosed by AI
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AI's failure: AI gave outdated information as if it were current
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Risk for the Company Secretaries: Statutory filing or board pack rests on a procedural requirement that doesn't exist
A Company Secretary relying on this AI response would receive the same false assurance — that the 2016 guidance 'has not been formally revised or replaced' — despite the CPMI-IOSCO consultative revision document having been publicly available for 22 days at the time of testing. For a practitioner advising FMI clients across multiple international jurisdictions, this error is particularly costly: the CPMI-IOSCO framework is often used as the common international reference point across national regimes, so a misstated status propagates into every jurisdiction-specific compliance assessment built on it. The client loses the opportunity to engage with the active consultation, and the practitioner's advice record reflects a material misstatement about the regulatory environment.
Principles for Financial Market Infrastructures (PFMI)
Hallucinations (1)
PFMI Principle 2 board risk committee — mandatory or conditional?
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AI's failure: AI confidently answered incorrectly; when challenged, it admitted it didn't really know — right or wrong
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Risk for the Company Secretaries: Statutory filing or board pack rests on a procedural requirement that doesn't exist
A Company Secretary who relies on this AI response may draft board committee terms of reference, or sign off on a PFMI self-assessment, on the basis that a specific numbered sub-provision imposes (or does not impose) a hard requirement to establish a risk committee — when no such sub-provision exists in the form cited. If the error enters a board governance framework at an FMI operating across multiple jurisdictions, it is likely to be replicated in subsidiary charters and regional board templates before anyone verifies the underlying source. The consequence ranges from a governance framework that is non-compliant with the actual PFMI standard, to advice to a board that it has satisfied an obligation it has not in fact met — or, conversely, that it has an obligation it does not. Either version of the error carries reputational and regulatory exposure for the Company Secretary and the entity they advise.