EBA to begin EU validation of ISDA SIMM from March 2026

The European Banking Authority (EBA) will commence the central validation of the International Swaps and Derivatives Association Standard Initial Margin Model (ISDA SIMM) on 1 March 2026. The decision outlining the operational framework for this validation function has been published today.

This initiative is part of the EBA’s role as a central validator of pro forma models, ensuring consistent and transparent oversight of initial margin models across the EU. Under the amended European Market Infrastructure Regulation (EMIR), the EBA is mandated to establish and operate an EU-level validation function for these models used in non-centrally cleared OTC derivatives.

The validation function is now operational and ready to start on 1 March 2026. The accompanying decision details onboarding, application procedures, governance, cooperation with authorities and ISDA, and criteria for ongoing monitoring of model changes.

In accordance with EMIR, the EBA has obtained the list of counterparties using ISDA SIMM, following data collection launched on 7 November 2025. In the first phase, these counterparties will be contacted for onboarding. The second phase, starting in August 2026, will involve submission of validation applications. The first validation decision is expected in Q4 2026, covering the list of applicable counterparties.

Until then, counterparties may continue using ISDA SIMM-based models if they have applied for authorization with their competent authorities, in line with EMIR and the EBA’s no-action letter published on 17 December 2024. Additional information on the validation process, timelines, and arrangements will be available soon on the EBA’s website.