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.
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 consider | must | Compliance obligation conjured that does not yet exist |
| may require | requires | Conditionality stripped — obligation treated as unconditional |
| proposes | mandates | Proposed rule treated as enacted mandate |
| is consulting on | has finalised | Consultation stage erased — finality asserted prematurely |
| invited to comment | required to comply | Consultation invitation transformed into compliance requirement |
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.
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/