On June 1, 2015, ISDA® announced that it has launched a licensing program for its recently introduced standard initial margin model (SIMM™), designed to facilitate compliance with US and non-US uncleared derivatives margin collateral regulations.

As part of the SIMM licensing program, service providers will receive:

There is no charge for market participants to use SIMM to calculate margin with respect to their own uncleared trades.

The purpose of SIMM is to establish a single model that meets global regulatory standards, which all authorized licensees can use to exchange uncleared derivatives margin collateral in a manner that is consistent with uncleared derivatives margin rules across jurisdictions (see Legal Update, ISDA Releases Reg-Compliant Margin Model for Uncleared Swaps; New CSA in the Works). The common framework to calculate initial margin:

The Working Group on Margining Requirements (WGMR) jointly run by the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) published the final global framework for uncleared derivatives margining in September 2013. The WGMR framework set a phased implementation schedule for initial margin, beginning September 1, 2016 for the largest derivatives users and extending through to September 2020 (see Legal Update, Final Global Margin Rules for Uncleared Derivatives Released by International Regulators).

European, Japanese and US authorities published proposed rules for uncleared derivatives following the WGMR framework in 2014. None of these jurisdictions have published final rules. (For details on the US proposals, see Practice Note, The Dodd-Frank Act: Margin Posting and Collection Rules for Uncleared Swaps and CFTC Re-proposes Corollary Dodd-Frank Margin Rules for Uncleared Swaps.)