Stretched margins: growing pains for Simm

The standard initial margin model could become more strained as its use expands in 2017

Tall order: the model will soon face a new set of challenges

So far, those behind the standard initial margin model (Simm) have plenty to be proud of. There were certainly jitters in the weeks and days preceding the launch of initial margin rules for non-cleared derivatives in the US, Canada and Japan on September 1, but the Simm's performance in the past three months with the 21 banks caught in the first phase of the rules has gone relatively smoothly.

To its supporters, the model designed by a forum organised by the International Swaps and Derivatives A