EBA launches central validation for ISDA SIMM models
The European Banking Authority (EBA) will commence central validation of the International Swaps and Derivatives Association Standard Initial Margin Model (ISDA SIMM) on 1 March 2026. This new function ensures consistent supervisory oversight of initial margin models across the EU.
New EU validation function goes live
The European Banking Authority (EBA) will launch its central validation function for the ISDA SIMM on 1 March 2026. This new role, mandated under the amended European Market Infrastructure Regulation (EMIR), aims to ensure consistent, robust, and transparent supervisory oversight of initial margin models across the European Union.
The EBA today published its Decision on arrangements for ISDA SIMM validation, which outlines the operational framework for this new function.
This marks a crucial step in the EBA's commitment to enhancing financial stability by standardizing the assessment of pro forma models used for non-centrally cleared over-the-counter derivatives.
The EBA has confirmed its central validation function is fully operational and ready to commence.
Phased onboarding for counterparties
The EBA has identified counterparties using ISDA SIMM through a November 2025 data collection.
These entities will undergo phased onboarding onto the EBA's validation system.
Applications for SIMM validation are expected to open in August 2026. The EBA aims to issue its first validation decision in Q4 2026. Until then, counterparties may continue using ISDA SIMM-based models, provided they have applied for authorization from their competent authorities, aligning with EMIR and the EBA's December 2024 no-action letter.
Further details on the validation process will be available on the EBA's website.