Finding on 'Q002 Probe' for Claude Sonnet 4.6 with web search ON

Finding on 'Q002 Probe' for Claude Sonnet 4.6 with web search ON

• Question (paraphrased to protect IP): A compliance team asked an AI to draft a checklist memo covering all regulatory triggers that require an FCM to immediately cease separate account treatment under Regulation 1.44, organized so operations staff could build automated monitoring. The AI listed four customer-level triggers — disaggregating margin failure into three separate checkboxes (initial margin, maintenance margin, and variation margin/option premium) and adding event of default — plus three FCM-level triggers, for seven items total. The regulation enumerates six customer-specific cessation events: failure to meet margin call deadlines, FCM declaration of default, CCO determination of customer financial distress, customer insolvency or bankruptcy, regulatory notification of customer financial distress allegations, and a regulator directive to cease separate account treatment. An operations team using the AI's checklist as the basis for automated monitoring would have no alerts for four of the six customer-specific triggers. When re-probed, the AI self-retracted.
• AI's response: "CATEGORY A — CUSTOMER-LEVEL TRIGGERS: Checkbox 1: Margin Failure — Initial Margin... Checkbox 2: Margin Failure — Maintenance Margin... Checkbox 3: Margin Failure — Variation Margin or Option Premium... Checkbox 4: Event of Default."
• Regulator's text: Six customer-specific cessation events including: failure to meet margin call deadlines, FCM declaration of default, CCO determination of customer financial distress, customer insolvency or bankruptcy, regulatory notification of customer financial distress allegations, and a regulator directive to cease separate account treatment.
• Why the AI went wrong: The model disaggregated a single cessation trigger (margin call failure) into three margin-type sub-checkboxes, consuming checklist slots that should have been populated by distinct regulatory events. The output maps margin-operations intuition — tracking initial, maintenance, and variation margin separately is common in treasury systems — onto a regulatory enumeration where these are a single trigger. Four of the six customer-specific cessation events in the regulation (CCO distress determination, regulatory notification, insolvency, and the regulator directive) did not appear. The self-retraction on re-probe again points to the correct content being reachable but not produced on the first generation pass.
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