Recital 24

(24) In order to comply with the initial margin requirements set out in Regulation (EU) No 648/2012, a large number of Union market participants use industry-wide, pro forma initial margin models. Given that those models are used industry-wide, they are unlikely to be significantly modified by the preference of every single user or by the different assessments of every single competent authority that authorises the use of those models by the entities it supervises. In practice, since the same model is used by a large number of Union counterparties, the consequent need for that model to be validated by a plurality of competent authorities gives rise to a coordination problem. To address that problem, EBA should be given the task of operating as a central validator of such pro forma models. In its role as central validator, EBA should validate the elements and general aspects of those pro forma models, including their calibration, design, and coverage of instruments, assets classes, and risk factors. To assist its work, EBA should collect feedback from competent authorities, ESMA and EIOPA, and coordinate their collective views. Given that competent authorities would continue to be responsible for authorising the use of those pro forma models and for monitoring their implementation at the supervised entity level, EBA should assist competent authorities in their approval processes regarding the general aspects of the implementation of those pro forma models. In addition, EBA should serve as a single point of discussion with the industry to help ensure more effective Union coordination on the design of such models. Competent authorities will remain responsible for authorising the use of such models and for monitoring the implementation of those models at the supervised entity level.

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Source: EUR-Lex (Cellar) · retrieved 2026-10-16 · Text as adopted (Official Journal); later amendments are not incorporated in this text.