The EBA consults on fees to validate pro forma models under the European Market Infrastructure Regulation

The European Banking Authority (EBA) launched today a public consultation on fees to be paid by financial and non-financial counterparties requiring the validation of pro forma models under the European Market Infrastructure Regulation (EMIR). The consultation runs until 7 April 2025.

​Under EMIR, the EBA is granted the new role as central validator of pro forma models for the whole European Union. Pro forma models, such as ISDA SIMM, are used by the industry to calculate initial margin. To perform this new role, the EBA will charge financial and non-financial counterparties an annual fee per each validated pro forma model. The fees are expected to cover the costs incurred by the EBA in performing this role as central validator.

The discussion paper outlines the EBA budgeting approach and the main estimated costs for the performance of the tasks as central validator. In particular, it proposes calculation methods for the fees to be charged to counterparties and specifies practical aspects such as the fees modalities of payment.

Consultation process

Comments to this consultation can be sent to the EBA by clicking on the "Send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 7 April 2025. All contributions received will be published following the close of the consultation, unless requested otherwise.

Legal basis, background and next steps

Article 11(12a) of EMIR mandates the EBA to set up a central validation function for the elements and general aspects of pro forma models, and changes thereto, used or to be used by financial counterparties and non-financial counterparties. The EBA shall charge an annual fee, per pro forma model, to financial counterparties and non-financial counterparties using the pro forma models validated by EBA.

On 31 July 2024, the EBA received a Call for advice on a possible Delegated Act on fees with the request to submit its response by Q2 2025. The EBA is requested to ‘widely consult market participants’ as part of its response.

The feedback received from this consultation will help the EBA finalise its response to the European Commission’s call for advice on a possible Delegated Act on fees.