A futures commission merchant needs to distinguish two '20 percent' requirements in the CFTC's December 2025 digital asset framework — one applied to customer-posted collateral and one to the firm's proprietary holdings. For the customer margin haircut requirement, what specific rule governs the haircut calculation when multiple registered clearing organizations each accept the same digital asset but at different haircut rates?
The model answered the single-DCO or no-DCO case — the 20 percent floor — but dropped the multi-DCO tie-breaking rule entirely. The question was specifically about the governing rule when multiple clearing organisations each accept the same asset at different rates; the regulator's answer is unambiguous (use the highest). The model's response leaves an FCM believing it may choose among the available DCO haircut rates, when the regulator requires the worst-case selection.
The dropped multi-DCO worst-case selection rule implicates retrieval-layer answer construction for questions with a numeric threshold and a tie-breaking rule. The model retrieved and stated the base threshold correctly but did not surface the governing rule for the multi-party case, which is the only rule that matters when the question explicitly concerns multiple DCOs accepting the same asset. This is likely a training-data density issue for the FAQ-level elaboration of this rule, combined with a tendency to answer the simpler version of a numeric-threshold question when the more complex governing rule requires an additional retrieval step.
For a lawyer advising an FCM on its haircut methodology for customer-posted digital asset collateral, AI output that correctly explains the 20% floor for assets not accepted by any DCO but omits the multi-DCO tiebreaker leaves the FCM without the operative rule for the most commercially significant scenario — where competing registered clearing organisations each accept the same asset at different haircut rates. The FCM applying the 20% floor rather than the highest accepted rate is understating required haircuts, miscalculating customer margin, and potentially undercollateralised.
The lawyer's advice, accurate as far as it goes, is incomplete in the scenario the client is most likely to encounter.
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.
RegLeg Specialist Panel, Finding#3 — Multi-DCO haircut tiebreaker: highest-accepted-rate rule omitted [RLB-F-US-CFTC-DIGITAL-ASSET-COLLATERAL-TOKENIZED-ASSETS-STAFF-GUIDANCE-2025-Q007], RegLegBrief AI Hallucination Research (June 04, 2026), https://reglegbrief.com/regulators/j3/us/cftc/digital-asset-collateral-tokenized-assets-staff-guidance-2025/practitioners/lawyers/finding/US-CFTC-US-001-DIGITAL-ASSET-COLLATERAL-TOKENIZED-ASSETS-STAFF-GUIDANCE-2025-v1-007/.
RegLeg Specialist Panel (2026). "Finding#3 — Multi-DCO haircut tiebreaker: highest-accepted-rate rule omitted — Practitioners — Lawyers." Citation ID: RLB-F-US-CFTC-DIGITAL-ASSET-COLLATERAL-TOKENIZED-ASSETS-STAFF-GUIDANCE-2025-Q007. RegLegBrief AI Hallucination Research, published 2026-06-04. https://reglegbrief.com/regulators/j3/us/cftc/digital-asset-collateral-tokenized-assets-staff-guidance-2025/practitioners/lawyers/finding/US-CFTC-US-001-DIGITAL-ASSET-COLLATERAL-TOKENIZED-ASSETS-STAFF-GUIDANCE-2025-v1-007/
RegLeg Specialist Panel. (2026). Finding#3 — Multi-DCO haircut tiebreaker: highest-accepted-rate rule omitted [Hallucination finding RLB-F-US-CFTC-DIGITAL-ASSET-COLLATERAL-TOKENIZED-ASSETS-STAFF-GUIDANCE-2025-Q007]. RegLegBrief AI Hallucination Research. https://reglegbrief.com/regulators/j3/us/cftc/digital-asset-collateral-tokenized-assets-staff-guidance-2025/practitioners/lawyers/finding/US-CFTC-US-001-DIGITAL-ASSET-COLLATERAL-TOKENIZED-ASSETS-STAFF-GUIDANCE-2025-v1-007/
@misc{reglegbrief_RLB_F_US_CFTC_DIGITAL_ASSET_COLLATERAL_TOKENIZED_ASSETS_STAFF_GUIDANCE_2025_Q007,
author = {RegLeg Specialist Panel},
title = {Finding#3 — Multi-DCO haircut tiebreaker: highest-accepted-rate rule omitted},
year = {2026},
publisher = {RegLegBrief AI Hallucination Research},
note = {Hallucination finding Citation ID: RLB-F-US-CFTC-DIGITAL-ASSET-COLLATERAL-TOKENIZED-ASSETS-STAFF-GUIDANCE-2025-Q007},
url = {https://reglegbrief.com/regulators/j3/us/cftc/digital-asset-collateral-tokenized-assets-staff-guidance-2025/practitioners/lawyers/finding/US-CFTC-US-001-DIGITAL-ASSET-COLLATERAL-TOKENIZED-ASSETS-STAFF-GUIDANCE-2025-v1-007/}
}