---
type: "AIHallucinationFinding"
title: "A capital management team at a major CCP is preparing an annual LNAFE sufficiency review. Provide…"
citation_id: "RLB-H-INT-BIS-CPMI-IOSCO-PFMI-L3-GENERAL-BUSINESS-RISK-2025-Q002-Sonnet46"
finding_uid: "INT-BIS-CPMI-INT-001-CPMI-IOSCO-PFMI-L3-GENERAL-BUSINESS-RISK-2025-v1-002--sonnet-46-websearch"
question_uid: "INT-BIS-CPMI-INT-001-CPMI-IOSCO-PFMI-L3-GENERAL-BUSINESS-RISK-2025-v1-002"
regulation_id: "INT-BIS-CPMI-INT-001-CPMI-IOSCO-PFMI-L3-GENERAL-BUSINESS-RISK-2025"
regulation_slug: "CPMI-IOSCO-PFMI-L3-GENERAL-BUSINESS-RISK-2025"
regulation_title: "Implementation Monitoring of the PFMI: Level 3 Assessment on General Business Risks"
regulator_short_code: "BIS-CPMI"
regulatory_body_id: "BIS-CPMI-INT-001"
jurisdiction_code: "INT"
j_level: "J1"
ai_subject: "claude-sonnet-4-6"
ai_subject_display: "Claude Sonnet 4.6 (web search on)"
ai_subject_version: "sonnet-46-websearch"
response_failure_mode: "inference_drift"
substrate_document_name: "p_03_NOTICE_d228_Annex_A_reproducing_PFMI_Principle_p251107.htm"
substrate_document_path: "https://reglegbrief.com/substrate/INT/BIS-CPMI/CPMI-IOSCO-PFMI-L3-GENERAL-BUSINESS-RISK-2025/_raw_manual_substrate/p_03_NOTICE_d228_Annex_A_reproducing_PFMI_Principle_p251107.htm"
substrate_section_anchor: "d228 Annex A reproducing PFMI Principle 15 KC3 — Basel capital carve-out"
citation_issue_types: ["Contradictory"]
audiences: ["ai_labs"]
published_at: "2026-06-03T12:34:10.472171+00:00"
substrate_version: 1
methodology_version: "2.3"
license: "CC-BY-4.0"
resource: "https://reglegbrief.com/regulators/j1/int/bis-cpmi/CPMI-IOSCO-PFMI-L3-GENERAL-BUSINESS-RISK-2025/ai-labs/finding/INT-BIS-CPMI-INT-001-CPMI-IOSCO-PFMI-L3-GENERAL-BUSINESS-RISK-2025-v1-002--sonnet-46-websearch/"
tags: ["ai-hallucination", "inference_drift", "bis-cpmi", "cpmi-iosco-pfmi-l3-general-business-risk-2025", "int"]
timestamp: "2026-06-16T00:00:00+00:00"
---

# AI Hallucination Finding: A capital management team at a major CCP is preparing an annual LNAFE sufficiency review. Provide…

- **Citation ID.** `RLB-H-INT-BIS-CPMI-IOSCO-PFMI-L3-GENERAL-BUSINESS-RISK-2025-Q002-Sonnet46`
- **Finding UID.** `INT-BIS-CPMI-INT-001-CPMI-IOSCO-PFMI-L3-GENERAL-BUSINESS-RISK-2025-v1-002--sonnet-46-websearch`
- **Regulation.** [`CPMI-IOSCO-PFMI-L3-GENERAL-BUSINESS-RISK-2025`](/okf/regulations/CPMI-IOSCO-PFMI-L3-GENERAL-BUSINESS-RISK-2025.md) — Implementation Monitoring of the PFMI: Level 3 Assessment on General Business Risks
- **Regulator.** [`BIS-CPMI-INT-001`](/okf/bodies/BIS-CPMI-INT-001.md) — Bank for International Settlements — Committee on Payments and Market Infrastructures (CPMI)
- **AI subject.** Claude Sonnet 4.6 (web search on)
- **Failure mode.** [`inference_drift`](/okf/taxonomy/failure-modes.md)
- **Published.** 2026-06-03T12:34:10.472171+00:00

## Question put to the AI subject

A capital management team at a major CCP is preparing an annual LNAFE sufficiency review. Provide an internal policy note specifying what capital instruments qualify toward LNAFE under PFMI Principle 15 Key Consideration 3, what must be held separately, and whether equity already held in compliance with international risk-based capital standards such as Basel or CRD frameworks can be counted toward LNAFE or must be held on top.

## AI subject's verbatim answer

KC3 of PFMI Principle 15 does NOT include any carve-out or exception for equity held under international risk-based capital standards such as Basel CET1. KC3 is the segregation requirement, not the equity-type or asset-quality provision.

## Verbatim regulator text contradicting the answer

> However, equity held under international risk-based capital standards can be included where relevant and appropriate to avoid duplicate capital requirements.

_Source:_ [p_03_NOTICE_d228_Annex_A_reproducing_PFMI_Principle_p251107.htm](https://reglegbrief.com/substrate/INT/BIS-CPMI/CPMI-IOSCO-PFMI-L3-GENERAL-BUSINESS-RISK-2025/_raw_manual_substrate/p_03_NOTICE_d228_Annex_A_reproducing_PFMI_Principle_p251107.htm)
_Section anchor:_ d228 Annex A reproducing PFMI Principle 15 KC3 — Basel capital carve-out

## Failure mode

**`inference_drift`** — Inference drift — the AI inferred a conclusion the regulator's text does not warrant, often by combining unrelated provisions.

## Citation-issue types

- **Contradictory** — <https://www.bis.org/cpmi/publ/d228.pdf>
- **Contradictory** — <https://www.bis.org/cpmi/publ/d229.htm>
- **Contradictory** — <https://www.bis.org/cpmi/publ/d229.pdf>
- **Contradictory** — <https://www.iosco.org/library/pubdocs/pdf/IOSCOPD807.pdf>
- **Contradictory** — <https://www.bis.org/cpmi/info_pfmi.htm>
- **Contradictory** — <https://finadium.com/bis-warns-fmis-on-capital-shortfall-plans-and-risk-profile-of-lnafe/>

## Related concepts

- Regulation: [CPMI-IOSCO-PFMI-L3-GENERAL-BUSINESS-RISK-2025](/okf/regulations/CPMI-IOSCO-PFMI-L3-GENERAL-BUSINESS-RISK-2025.md)
- Regulator: [BIS-CPMI-INT-001](/okf/bodies/BIS-CPMI-INT-001.md)
- Failure-mode taxonomy: [inference_drift](/okf/taxonomy/failure-modes.md)
- Methodology: [v2.3](/okf/methodology.md)
- Editorial standards: [right of reply](/okf/editorial-standards.md)

## Reproduction

Citation ID: `RLB-H-INT-BIS-CPMI-IOSCO-PFMI-L3-GENERAL-BUSINESS-RISK-2025-Q002-Sonnet46`

Resource URL (HTML view of this finding):

<https://reglegbrief.com/regulators/j1/int/bis-cpmi/CPMI-IOSCO-PFMI-L3-GENERAL-BUSINESS-RISK-2025/ai-labs/finding/INT-BIS-CPMI-INT-001-CPMI-IOSCO-PFMI-L3-GENERAL-BUSINESS-RISK-2025-v1-002--sonnet-46-websearch/>

This finding is reproducible against the substrate document linked above, using the same AI subject, the same methodology version, and the verbatim question text.