The European Banking Authority (EBA) launched a data collection, through the competent authorities, to obtain the list of EU counterparties that will be required to apply to the EBA for validation of ISDA SIMM. The EBA underscores the counterparties’ obligation to apply for the authorization of the use of initial margin models and warns of the legal consequences in case of non-authorized use under the European Market Infrastructure Regulation (EMIR).
All financial and non-financial counterparties exchanging initial margins (IM) calculated – directly or indirectly – using IM models based on ISDA SIMM should apply to their competent authorities for the authorization of such models as per EMIR and the EBA’s no-action letter published on 17 December 2024.
Counterparties must provide their competent authorities with the information requested. This information will be used to onboard counterparties onto the EBA’s validation system during the first semester of 2026, ahead of counterparties’ applications to the EBA for validation of ISDA SIMM expected in the second semester of 2026.
Counterparties failing to apply for the EBA’s validation will no longer be permitted to use ISDA SIMM under EMIR until they rectify their status with the EBA.