This is the consolidated view of findings. Click the Citation IDs or 'see details →' on any item for the full details for each finding.
A lawyer drafting a Principle 15 compliance opinion for a CCP that holds Basel CET1 needs the KC3 carve-out condition stated accurately: equity counted toward LNAFE must satisfy the 'relevant and appropriate to avoid duplicate capital requirements' qualifier — nothing more, nothing less. AI tools tested on this question either replaced that condition with a KC4 liquidity screen that does not appear in KC3, or flatly denied the carve-out exists.
Either version produces an opinion that is wrong on the law: the first imposes a stricter standard than the regulation requires; the second advises the client to exclude capital it is permitted to include. Both errors surface in regulatory examination or in counterparty due diligence.
KC3's LNAFE minimum is a single floor: six months of current operating expenses. AI tools we tested recast this as a 'greater of' dual-track minimum — (i) six months of operating expenses or (ii) the amount derived from KC2's scenario analysis, whichever is higher. That structure does not appear in KC3; the scenario-analysis sizing obligation is in KC2. A compliance opinion or board briefing that adopts the AI's framing imposes on the FMI a combined test that the regulation does not require, potentially causing the client to over-capitalise or to mischaracterise its methodology in a regulatory submission.
For lawyers preparing methodology notes on the Level 3 assessment — whether for a trade repository's internal regulatory engagement summary, a board briefing, or input into the consultation response — the assessment's timeline is a factual anchor. AI tools tested stated the assessment ran 'during the period 2023 to 2024,' dropping the April 2025 findings-sharing phase documented in the primary source.
A note that truncates the assessment at 2024 misrepresents the scope of FMI engagement and the process by which the regulator validated its findings, which is material if the document is used in a regulatory submission or examined in an audit.