On 29 October 2024, the European Banking Authority (EBA), in cooperation with the other European Supervisory Authorities, issued a short survey addressed to entities within the scope of the initial margin (IM) model authorisation regime introduced by the upcoming revised European Market Infrastructure Regulation (EMIR 3).

Background

EMIR 3 is expected to grant the EBA with the additional task to set up a central validation function for the elements and general aspects of pro-forma models (such as ISDA SIMM), and changes thereto, used or to be used by a subset of financial and non-financial counterparties as part of the risk mitigation techniques used on their portfolios of non-centrally cleared over-the-counter derivatives.

In the summer, the EBA received a call for advice on a possible Delegated Act on fees to be charged to financial and non-financial counterparties requiring the validation by the EBA of pro-forma models, with the request to submit its response by Q2 2025. As part of its response, the EBA is requested to provide a ‘quantitative and qualitative cost-benefit analysis of all the options considered and proposed’ and to ‘widely consult market participants’.

Next steps

The deadline for responding to the survey is 29 November 2024, via an online tool that can be accessed under the following link: https://ec.europa.eu/eusurvey/runner/IMMVEMIR3

Closer to the EMIR 3 publication, the EBA will publish on its website operational clarifications aimed to ensure a smooth, convergent entry into force of EMIR 3 requirements in the EU.