On 5 August 2026, the European Banking Authority (EBA) issued a consultation paper on a new reporting framework to support the validation and ongoing monitoring of initial margin models based on the ‘Standard Initial Margin Model’ (SIMM) developed by the International Swaps and Derivatives Association (ISDA).  The proposed reporting requirements will provide the EBA with information necessary to effectively perform its role as central validator of pro forma models under EMIR, while ensuring a proportionate approach for reporting entities.

Background

The European Market Infrastructure Regulation (EMIR), as amended by Regulation (EU) 2024/2987 (EMIR 3), introduced new requirements for the models used to calculate initial margin for non-centrally cleared over-the-counter derivative contracts. Under Article 11(12a) of EMIR (as amended), the EBA is mandated to centrally validate the elements and general aspects of pro forma models used by financial counterparties and non-financial counterparties subject to initial margin requirements. The ISDA SIMM qualifies as a pro forma model within the meaning of Article 11(12a) of EMIR.

The EBA’s central validation function became operational on 1 March 2026.

The EBA’s consultation paper sets out the information that counterparties seeking validation for the use of ISDA SIMM would be required to submit on a regular basis. The information is intended to enable the EBA to validate the model and monitor its performance on an ongoing basis, in accordance with the EBA Decision on arrangements for the Initial Margin Model Validation function under EMIR (EBA/DC/610) and the related Delegated Act on fees. It will also support Member State competent authorities in their authorisation and supervision of the use of initial margin models based on ISDA SIMM. 

Next steps

The deadline for comments on the consultation paper is 2 November 2026.

After considering the feedback received during the consultation, the EBA intends to adopt a Decision by the end of 2026 establishing the collection of the relevant information.

The first reporting reference date is expected to be December 2027 and data to be collected in the first quarter of 2028.

The new reporting requirements will be incorporated into the EBA technical package version 4.4, Phase 2. The final technical package is expected to be released in March 2027.

The EBA will collect the information directly from reporting entities. Operational arrangements for the data collection process will be communicated at a later stage to the entities onboarded onto the EBA ISDA SIMM validation system.