← RegLegBrief Findings by regulator All AI Labs whitepapers Hallucination Register Methodology Right of reply
AI Labs · White Paper · BIS-CPMI · INT · substrate v1

The model hardened consultation language into final-rule language.
The document is still a consultation.

Claude Sonnet 4.6, with web search active, substituted the modal verb register of the CPMI-IOSCO 2026 Initial Margin consultation, replacing "should consider", "may require", and "proposes" with "must", "requires", and "mandates". A consultation paper became final rule. The obligations don't exist yet.

📄 Consultation language (actual)
should considerproposes / invites comment
may requireconditional / not yet binding
proposesunder consultation
is consideringnot finalised
⚠️ Model output (wrong register)
musthardened — binding obligation
requireshardened — final rule
mandateshardened — no such mandate exists
shallhardened — legal obligation
📅 Published 7 Jun 2026 ⚙️ Methodology v2.3 📋 CPMI-IOSCO IM Consultation 2026
📰Read the public briefing for this regulation
What deontic register means in regulation

The difference between "should" and "must" is not a style choice

In regulatory documents, the choice between modal verbs is the substance of the rule. "Should" signals a recommendation or best practice. "Must" or "shall" signals a binding obligation enforceable by the supervisor. In a consultation paper, "proposes" and "is considering" signal that the rule is not yet in force and stakeholders are invited to comment before it becomes binding. The CPMI-IOSCO 2026 Initial Margin consultation uses consultation-register language throughout: it proposes updated guidance and disclosures, and invites comment before finalisation.

Claude Sonnet 4.6 replaced this consultation register with final-rule register. The effect is that a compliance officer or legal adviser reading the model's output would conclude that the proposed requirements are current binding obligations, when in fact they are proposals under consultation that do not yet have legal force.

What the consultation says
"FMIs should consider disclosing…"
Consultation proposal. Not yet binding. Comment period open.
What the model produced
"FMIs must disclose…"
Wrong register. Implies current binding obligation. Consultation has not closed.
The substitution pattern

Systematic verb hardening across the model's output

The deontic substitution here was not an isolated instance. it was systematic across the model's output on the 2026 consultation. The pattern: every consultation-register modal verb in the model's answers was replaced with a final-rule-register equivalent. The substitution was consistent and directional: always hardening, never softening.

Consultation paper (actual)Model output (wrong)Legal effect of error
should considermustCompliance obligation conjured that does not yet exist
may requirerequiresConditionality stripped — obligation treated as unconditional
proposesmandatesProposed rule treated as enacted mandate
is consulting onhas finalisedConsultation stage erased — finality asserted prematurely
invited to commentrequired to complyConsultation invitation transformed into compliance requirement
REGULATORY LIFECYCLE — WHERE THE CONSULTATION SITS Discussion Paper Consultation ← HERE (2026) Final Guidance Binding Implementation Model treated consultation as final rule → The 2026 consultation is open; its proposed requirements are not yet binding
The CPMI-IOSCO 2026 initial margin consultation is at the consultation stage. The model's output treated it as final guidance with binding obligations.
Operational signal

Why deontic drift matters for compliance teams

A CCP compliance officer, margin operations lawyer, or regtech product team building initial margin disclosure workflows who receives output treating consultation proposals as current obligations will over-invest in compliance against rules that do not yet exist, potentially before the final guidance modifies the proposed requirements in response to industry comment.

Compliance impact of deontic substitution

Treating consultation proposals as final obligations creates compliance plans against non-binding text. The risk is compounded if the final guidance differs from the consultation proposals, which it commonly does after the comment period. An AI tool that erases the consultation stage produces a wrong legal picture at precisely the point when the correct picture (proposals, not obligations) matters most for business planning.

Full hub: CPMI-IOSCO-INITIAL-MARGIN-DISCLOSURE-CONSULT-2026 →

Hallucination Register: reglegbrief.com/hallucination-register/