The EBA consults on regulatory products on Initial Margin Model Authorisation

The European Banking Authority (EBA) today launched two public consultations on draft Guidelines and draft Regulatory Technical Standards (RTS) on initial margin model authorisation (IMMA) under the European Market Infrastructure Regulation (EMIR). These consultations mark an important step in ensuring that models used for the exchange of initial margin for non-centrally cleared derivatives are subject to a robust, efficient and harmonised authorisation process across the EU. The consultations run until 17 June 2026.

Under the new EMIR 3 rules, counterparties using internal initial margin models must obtain prior authorisation from their competent authority (CA). The two regulatory products published today aim to support a transparent, predictable, and consistent approach to model assessment and authorisation throughout the Union. The draft Guidelines specify the minimum information and documentation that counterparties must submit for their application to be considered complete. These requirements build on the information already outlined in the Annex to the EBA's No Action Letter on the application of EMIR, published in December 2024, which will cease to apply once the new Guidelines enter into force.

The Draft RTS set out the assessment techniques that CAs will apply when authorising initial margin models. They only apply to counterparties belonging to groups with an aggregate monthly average notional amount (AANA) of non-centrally cleared over-the-counter (OTC) derivatives exceeding EUR 750 billion. Where an internal model relies on a pro-forma model, it must be validated by the EBA prior to authorisation by the CA.

Consultation process

Responses to the consultation can be sent by clicking on the "send your comments" button on the consultation page.

All contributions received will be published after the consultation closes, unless requested otherwise. The deadline for the submission of comments is 17 June 2026

A public hearing on this consultation will take place on 4 May 2026 from 10:00 to 12:00 CEST. Deadline for registration is 30 April 2026 at 16:00 CEST.

Legal basis and background

Regulation (EU) 2024/2987 (EMIR 3) introduced the requirement to request prior authorisation for the use of initial margin (IM) models as a risk-mitigation technique for OTC derivative contracts not cleared by a central counterparty.

Article 11(3), sixth subparagraph, EMIR empowers the EBA, in cooperation with ESMA and EIOPA, to issue guidelines or recommendations with a view to ensuring the uniform application and authorisation process of the risk-management procedures.

Under Article 11(15) of EMIR the EBA in cooperation with ESMA is mandated to establish supervisory procedures for the initial and ongoing validation of the risk management procedures (i.e. Initial margin models) referred to in Article 11. This scope of firms captured includes credit institutions authorised in accordance with Directive 2013/36/EU and investment firms authorised in accordance with Directive 2014/65/EU that have, or belong to a group that has, a monthly AANA of non-centrally cleared OTC derivatives that exceeds EUR 750 billion. The calculation of AANA is set out in regulatory technical standards developed by the ESAs

The EBA's Decision on the EU central validation of ISDA SIMM, published on 1 March 2026, provides further clarity on the EBA's role in validating pro-forma initial margin models prior to CA authorisation. Initial margin models that are based on pro forma models will need to first be validated by the EBA.