C740 – Data Collection Requirements for EMIR Initial Margin Model Authorisation
On 12th December 2025, the Cyprus Securities and Exchange Commission (CySEC) has released Circular C740, addressed to Regulated Entities, including Cyprus Investment Firms (CIFs), UCITS and their Management Companies, Alternative Investment Funds (AIFs) and AIFMs, as well as Non-Financial Counterparties. This circular relates to the data collection exercise for the onboarding of financial and non-financial counterparties that are subject to the obligation to apply for authorisation and validation of their initial margin (IM) models, in accordance with Article 11(3) of Regulation (EU) No 648/2012 (EMIR). CySEC informs Regulated Entities that the European Banking Authority (EBA) launched a formal data collection exercise through competent authorities to identify EU counterparties required to apply for validation of their ISDA Standard Initial Margin Model (ISDA SIMM).
Through this Circular, CySEC highlights key regulatory requirements and reporting obligations that entities in scope must comply with.
Key points for Circular C740
Regulatory framework under EMIR
- Financial counterparties and non-financial counterparties under Article 10(1), exceeding the relevant EMIR thresholds must apply for authorisation from their competent authority before using, or adopting changes to, an initial margin model. Where a pro-forma model (such as ISDA SIMM) is used, validation by the EBA is required prior to authorisation.
Entities required to apply for authorisation or validation are those that:
- Exchange initial margin (i.e. exceed both the clearing and initial margin thresholds) and they use an internal or pro-forma initial margin model to comply with EMIR requirements.
Reporting and data submission
- Regulated Entities using an initial margin model must apply for authorisation to CySEC under the no-action regime introduced on 17 December 2024 and submit the required EMIR IMM authorization and validation data by 16 January 2026 to emir@cysec.gov.cy.
- Regulated Entities must submit the information set out in the Annex to the EBA Opinion on the application of EMIR with respect to initial margin models, using the email subject line “EMIR IMM application for authorisation_LEI of Regulated Entity”.
- The completed EMIR IMM validation template must be also submitted, using the file name “EMIR IMM validation_LEI of Regulated Entity.xlsx”, which should be repeated in the email subject line, to emir@cysec.gov.cy.
Next steps
- Regulated Entities are urged to take immediate action to ensure ongoing compliance with EMIR, as failure to submit the required information will prevent onboarding to the EBA’s ISDA-SIMM Validation System and the ability to apply for validation of IM models, while the EBA’s no-action letter on IM model authorisation remains in force.
Contact us at compliance@salvusfunds.com if you have any questions or require support with your reporting obligations and regulatory requirements. We are always ready to answer your questions and support you in achieving regulatory compliance.
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The information provided in this article is for general information purposes only. You should always seek professional advice suitable to your needs.