The European Banking Authority (EBA) has launched a data collection via national competent authorities to identify EU financial and non-financial counterparties that calculate initial margin using models based on ISDA SIMM and will need to apply to the EBA for validation. The EBA reiterates that these counterparties must seek authorisation for the use of initial margin models through their competent authorities and warns that non-authorised use under the European Market Infrastructure Regulation (EMIR) has legal consequences, while the EBA’s no-action letter of 17 December 2024 remains in force. The request applies to counterparties required to exchange initial margin under Article 36 of Commission Delegated Regulation (EU) 2016/2251 that use, directly or indirectly, the ISDA SIMM pro forma model, which requires EBA validation under Article 11(3) of EMIR to continue using it. Counterparties must provide the information requested by their competent authorities; those using any initial margin model (whether or not based on ISDA SIMM) are also reminded to complete authorisation with their competent authority under the regime introduced by the 17 December 2024 no-action letter, ahead of the entry into application of ISDA SIMM v2.8+2506. The EBA plans to use the collected information to onboard counterparties to its validation system in the first semester of 2026, ahead of expected applications for EBA validation of ISDA SIMM in the second semester of 2026. Counterparties that have not applied for competent authority authorisation will not be able to apply for EBA validation in 2026, and counterparties that fail to apply for EBA validation will no longer be permitted to use ISDA SIMM under EMIR until they rectify their status; the EBA intends to publish the list of validated EU counterparties towards the end of 2026.
European Banking Authority2025-11-07
European Banking Authority launches data collection and warns EU ISDA SIMM users to obtain initial margin model authorisation and EBA validation under EMIR
The European Banking Authority (EBA) has initiated data collection through national competent authorities to identify EU counterparties using ISDA SIMM models for initial margin, requiring EBA validation. Counterparties must seek authorisation from their competent authorities under EMIR, with non-compliance carrying legal consequences. The EBA aims to onboard these counterparties to its validation system by mid-2026, with validation applications expected in the latter half of 2026.