Context Is Not Authority: Structured Runtime Governance for Financial Market Agents

Financial AI agents often operate by retrieving context (market data, dialogue history, or policy documents) and generating natural language outputs. A critical failure mode occurs when a system treats this fluent, factually correct context as sufficient authority to execute a financial action—such as committing to a trade, issuing personalized advice, or deploying a risk policy. Even if the underlying information is accurate, the agent may lack the specific runtime permission to act on it under the current state, leading to unauthorized commitments or policy drift.

SAGE-Fin introduces a finance-specific authority-handoff contract designed to decouple context from execution. Instead of allowing language models to trigger actions directly, SAGE-Fin compiles proposals into typed, adapter-bound candidates. These candidates are subjected to a rigorous runtime check that ensures:

• Coverage Debt: Missing or stale institutional obligations are explicitly tracked and must be resolved.
• State-Contingent Authorization: Authority is re-checked against current market, account, and policy states at the moment of execution.
• Exact-Artifact Receipts: Only an exact-artifact receipt that matches the specific consuming adapter (e.g., execution, response, or policy) can authorize an effect, preventing progress receipts from being misused as final execution permission.

As financial institutions increasingly adopt LLMs for customer-facing and market-facing tasks, the risk of "authority leakage" grows. Traditional safety measures often focus on hallucination or factual accuracy, but SAGE-Fin addresses the structural governance gap. By enforcing complete mediation and requiring explicit, typed receipts for every action, the framework ensures that financial agents remain within their defined operational boundaries, even when conversational context changes or market conditions evolve.