AI Hallucination Research › Regulators › Major advanced economies › SG › MAS › NOTICE-637-CAPITAL-ADEQUACY-BANKS-2025 › White paper › Detail › Finding
AI Labs · published 2026-05-28 · methodology v2.1

Claude Opus 4.7 with web search

What the RLB Specialist Panel found
  • Question (paraphrased to protect IP): Does MAS Notice 637 on risk-based capital adequacy apply to financial holding companies incorporated in Singapore, or is there a separate MAS notice for them, and if so, what is it?
  • AI's response: "Financial holding companies incorporated in Singapore are covered by a separate notice issued under the Financial Holding Companies Act — typically Notice FHC-N637 (Risk Based Capital Adequacy Requirements for Financial Holding Companies)"
  • Regulator's text: No MAS notice designated "FHC-N637" or titled "Risk Based Capital Adequacy Requirements for Financial Holding Companies" appears in the MAS regulatory record. MAS Notice 637 itself defines its own scope of application.
  • Why the AI went wrong: The model generated a specific, plausible-looking regulatory instrument designation — including a notice number and full title — that does not exist in the MAS regulatory record. Rather than noting the limits of what its search had retrieved about the scope of MAS Notice 637 and the regulatory treatment of financial holding companies, the model constructed a named instrument that mirrors the structure of the actual notice, producing a fabrication that is superficially credible but has no basis in the regulator's published framework.
  • Cited source(s):
Impact for this audience

This finding implicates the model's training data coverage of the MAS regulatory record and the generation layer's behaviour when retrieval returns no authoritative result for a specific regulatory instrument query. The model fabricated a complete notice designation — number and title — in a domain where the correct answer was 'this instrument does not exist or could not be located.' The gap is in how the generation layer handles absent retrieval signal for regulatory instrument lookups: rather than producing a calibrated 'not found' response, it synthesises a plausible-looking instrument by analogy with the known notice. Targeted eval coverage for regulatory instrument existence queries — where the correct answer is a null or a scope boundary, not a named instrument — would surface this failure mode systematically.

References — raw findings (per AI model)
This finding also affects
Next finding → Finding 2. Claude Opus 4.7 with web search
Cite this finding

Each finding has a stable Citation ID (RLB-F-… for aggregated case-study findings, RLB-H-… for raw per-model hallucinations) — like a DOI, the ID always resolves to the canonical finding even if URLs change.

Plain text 
RegLeg Specialist Panel (2026). "Claude Opus 4.7 with web search — AI Labs." Citation ID: . RegLegBrief AI Hallucination Research, published 2026-05-28. https://reglegbrief.com/regulators/j3/sg/mas/notice-637-capital-adequacy-banks-2025/whitepaper/finding/q-NOTICE-637-CAPITAL-ADEQUACY-BANKS-2025-v1-010--opus-47-websearch/
APA 7th edition 
RegLeg Specialist Panel. (2026). Claude Opus 4.7 with web search [Hallucination finding ]. RegLegBrief AI Hallucination Research. https://reglegbrief.com/regulators/j3/sg/mas/notice-637-capital-adequacy-banks-2025/whitepaper/finding/q-NOTICE-637-CAPITAL-ADEQUACY-BANKS-2025-v1-010--opus-47-websearch/
Bluebook / OSCOLA (US + UK legal) 
RegLeg Specialist Panel, Claude Opus 4.7 with web search [], RegLegBrief AI Hallucination Research (May 28, 2026), https://reglegbrief.com/regulators/j3/sg/mas/notice-637-capital-adequacy-banks-2025/whitepaper/finding/q-NOTICE-637-CAPITAL-ADEQUACY-BANKS-2025-v1-010--opus-47-websearch/.
BibTeX 
@misc{reglegbrief_,
  author    = {RegLeg Specialist Panel},
  title     = {Claude Opus 4.7 with web search},
  year      = {2026},
  publisher = {RegLegBrief AI Hallucination Research},
  note      = {Hallucination finding Citation ID: },
  url       = {https://reglegbrief.com/regulators/j3/sg/mas/notice-637-capital-adequacy-banks-2025/whitepaper/finding/q-NOTICE-637-CAPITAL-ADEQUACY-BANKS-2025-v1-010--opus-47-websearch/}
}
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