Company Secretaries working on the CPMI-IOSCO Principles for Financial Market Infrastructures (PFMI, 2012) are increasingly relying on AI to draft board and risk-committee terms of reference, prepare papers for the board's oversight of critical service providers, validate committee mandates against the PFMI's published Key Considerations, and assemble governance disclosures for the FMI's annual disclosure-framework return. 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 two findings in the class the team labels "Source-Credit Fabrication and Supervisor-Scope Inversion", 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-Q011-Sonnet46, RLB-H-INT-BIS-CPMI-IOSCO-PFMI-2012-Q022-Opus47.
For Company Secretaries, the failure shape matters because the work product is board charters, risk-committee terms of reference, board information papers on third-party oversight, and PFMI disclosure-framework responses, 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. Company Secretaries who route AI-drafted board and committee documentation into the FMI's governance pack are the population most exposed when the model misnumbers a Key Consideration or fabricates a committee-architecture mandate that the PFMI text does not contain.
The Panel documents the finding identifiers RLB-H-INT-BIS-CPMI-IOSCO-PFMI-2012-Q011-Sonnet46; RLB-H-INT-BIS-CPMI-IOSCO-PFMI-2012-Q022-Opus47. The AI subjects under test were Claude Opus 4.7 and Claude Sonnet 4.6, 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 Company Secretaries teams documenting the FMI's third-party oversight obligations in board papers and committee mandates, this inversion would result in committee charters and board information papers that describe the supervisor's reach as ending at the FMI boundary. Annex F's opening text contradicts that framing: it authorises regulators, supervisors, and overseers to establish expectations directed at CSPs. Board materials drafted on the wrong framing would misrepresent the firm's actual regulatory exposure and the board's risk picture.
For Company Secretaries 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.