EBA consults on reporting framework for validation and monitoring of ISDA SIMM

The European Banking Authority (EBA) has launched a consultation on a new reporting framework to support the validation and ongoing monitoring of the ISDA Standard Initial Margin Model (SIMM). This follows the EBA's assumption of responsibility as the central validator of pro forma initial margin models under the European Market Infrastructure Regulation (EMIR) from 1 March. To support this role, the EBA proposes a standardised set of regular reporting requirements for counterparties seeking validation to use ISDA SIMM. The information submitted would enable the EBA to validate and monitor model performance on an ongoing basis and calculate annual validation fees. The framework is designed to be proportionate, with entities that do not have significant over-the-counter trading activity required to provide only a limited subset of information on an annual basis.

The deadline for responses is 2 November. Subject to feedback, the EBA intends to adopt a decision establishing the reporting framework by the end of the year, with the first reporting reference date expected to be December 2027 and the first data collection taking place in the first quarter of 2028. The new requirements will be incorporated into version 4.4 (Phase 2) of the EBA technical package, which is expected to be finalised in March 2027. The EBA will collect the information directly from reporting entities, with operational arrangements to be communicated at a later stage. The proposed templates and instructions can be found in the press release.

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