The European Banking Authority (EBA) announced it will begin EU-level central validation of the International Swaps and Derivatives Association Standard Initial Margin Model (ISDA SIMM) on 1 March 2026 and published a Decision setting the operational framework for this new function. The validation role, mandated under the amended European Market Infrastructure Regulation (EMIR), covers pro forma initial margin models used for non-centrally cleared over-the-counter derivatives. The Decision, which enters into force on 1 March 2026, sets out onboarding and application procedures, governance and cooperation arrangements with competent authorities and ISDA, and criteria for ongoing monitoring and assessment of SIMM model changes. The EBA has obtained via competent authorities a list of financial and non-financial counterparties that exchange initial margin and use ISDA SIMM, based on a data collection launched on 7 November 2025, and will contact those counterparties for staged onboarding onto its validation system. Once onboarded, counterparties will be invited to submit SIMM validation applications, with this phase expected to start in August 2026. The EBA expects to issue its first SIMM validation decision in Q4 2026, including the list of counterparties to which it applies; pending that decision, counterparties may continue using ISDA SIMM-based initial margin models if they have applied to their competent authorities for authorisation in line with EMIR and the EBA’s no-action letter of 17 December 2024.

Original source View in tracker