Governance & Company Secretarial teams at Investment Banking firms working on the CPMI-IOSCO Principles for Financial Market Infrastructures (PFMI, 2012) are increasingly relying on AI to draft board charters and committee terms of reference under PFMI Principle 2, prepare board papers describing risk-management frameworks, generate committee-mandate templates for board subcommittees, and validate governance-policy language against the regulator-issued Key Considerations.
The PFMI framework is the global standard for systemically important payment systems, central counterparties, and securities settlement infrastructures, and the document's structure makes it particularly amenable to AI summarisation: numbered Principles, numbered Key Considerations, and lettered annexes that the model can address by number.
That surface structure is also what makes the failure mode the RegLeg Brief Specialist Panel records here invisible at runtime: the document is regularly cited by Key Consideration number in board papers, disclosure-framework returns, and counterparty representations, which means a misattributed citation does not register as a substantive error in the draft, it registers as a competent regulatory paragraph that the reader will not check against the regulator's primary text unless something else prompts the verification.
Two frontier AI models tested by the RegLeg Brief Specialist Panel produced confidently wrong reconstructions of the PFMI's governance and oversight architecture under Principle 2 (governance) and Annex F (oversight expectations for critical service providers). The Panel records one finding in the class the team labels "Source-Credit Fabrication", in which the models stated a substantively plausible governance position and pinned it to a named Key Consideration that the published PFMI text does not support. The finding identifiers are RLB-H-INT-BIS-CPMI-IOSCO-PFMI-2012-Q022-Opus47.
For Governance & Company Secretarial teams at Investment Banking firms, the failure shape matters because the work product is board charters, risk-committee terms of reference, governance policy manuals, and committee-mandate submissions to the FMI's board, all of which travel under the firm's name to a board, supervisor, counterparty, or public reviewer who can locate the cited Key Consideration and check it against the regulator's primary text.
Governance and Company Secretarial teams responsible for committee architecture at investment banks are the population most exposed when AI output imports a fabricated 'non-executive chair' mandate into a board charter, because the charter circulates to the board, the supervisor, and counterparty due-diligence reviewers, all of whom can locate the cited Key Consideration and check it.
The Panel documents the finding identifiers RLB-H-INT-BIS-CPMI-IOSCO-PFMI-2012-Q022-Opus47. The AI subjects under test were Claude Opus 4.7, each running with web search enabled, mirroring the workflow most practitioners run when they ask an assistant a Principle 2 or Annex F question. The verbatim regulator text is held as primary substrate (R2-REGULATION-d101a_PFMI_main_text.pdf). Each finding card sets out the exact strings the model produced, the verbatim regulator excerpt the model's output contradicts, and the failure-class label the RegLeg Brief Specialist Panel assigns.
The records are open-access; AI labs named in any finding have an unconditional right of reply, and the Specialist Panel will document any factual correction or contextual response alongside the original finding.
This is the consolidated view of findings. Click the Citation IDs or 'see details →' on any item for the full details for each finding.
For Governance & Company Secretarial teams at Investment Banking firms teams drafting board charters, risk-committee terms of reference, or governance policies to PFMI standards, this output would import a fabricated non-executive-chair mandate into the documentation. The PFMI deliberately leaves committee architecture to the FMI subject to the framework-level requirements in KC 6 (documented framework, independence of control functions). A committee mandate citing KC 6 as the basis for chair composition rules will misrepresent the regulatory basis for that design choice.
Every finding on this page compares an AI subject's account of the rule against the regulator's verbatim text from the regulator's own portal. Both are linked. Each delta, its root causes, and impact analysis are documented and published with immutable Citation IDs.