PFMI Principle 15 Failures: Conditional-Structure Fabrication and Carve-Out Denial across frontier AI models

Two frontier AI models running with web search enabled, both tested by the RLB Specialist Panel, produced confidently wrong reconstructions of the CPMI-IOSCO Level 3 Assessment Report on Authorities' Implementation of the PFMI Standards for Financial Market Infrastructures regarding General Business Risk, published by the Bank for International Settlements and IOSCO in November 2025 as BIS CPMI Papers No. 228 / IOSCOPD807.

The RegLeg Brief Specialist Panel tested both models on the assessment's text and on PFMI Principle 15, and documents findings in which the models invented a quantitative six-months-of-operating-expenses floor for Principle 15 key consideration 3 the standard does not state, fabricated named co-chairs and team co-leads for the Implementation Monitoring Standing Group, and compressed the 2023 to 2025 assessment window into "2023 and 2024" while attributing the answer to the published report.

Claude Opus 4.7, asked what the current PFMI Principle 15 minimum standard is for liquid net assets funded by equity, wrote that the floor is "the greater of the resources required to execute the firm's recovery or orderly wind-down plan, and six months of current operating expenses". The assessment report's own reproduction of Principle 15 states the minimum as the liquid net assets needed to implement the firm's recovery or orderly wind-down plan, and separately references the further CPMI-IOSCO guidance on recovery planning issued since 2014; the report does not state a six-months-of-operating-expenses figure as the binding KC3 floor.

The model converted a recovery-plan-sized obligation into a numerically anchored floor that reads as authoritative but does not appear in the source.

Asked who co-chaired the IMSG running the Level 3 exercise, Opus 4.7 declined to name individuals and directed the reader to the report's inside cover. Sonnet 4.6, in the parallel finding, asserted that the IMSG was co-chaired by the US Securities and Exchange Commission's Elizabeth L Fitzgerald and the European Central Bank's Fiona van Echelpoel, with team co-leads Corinna Freund of the ECB and Vishal Shukla of the Securities and Exchange Board of India. None of the four named individuals appears in the published report in those roles; the names, affiliations and roles are the model's construction.

Asked when the assessment was conducted, Sonnet 4.6 wrote that "the assessment work was carried out during 2023 and 2024". The published report states the work was carried out during 2023 to 2025 by the IMSG and a team of experts from CPMI and IOSCO member jurisdictions.

A CCP capital management team, central-bank supervisor, or trade-repository compliance lead drafting a Principle 15 sufficiency policy, a board paper, or a benchmarking note against either output would record a six-months floor the PFMI standard itself does not anchor, would cite IMSG co-chairs and team co-leads who do not appear in the report, and would mis-state the assessment window. That is the failure mode these findings document.