{"release":{"id":"a4f2a0495fe55b47323883f82977a9b34ab66171ec9623e39925d3a7045b6c81","published":"2026-11-01T16:41:30Z","pinned":false},"limits":{"coverage":{"history":"from:2023-02-14","held_since":"2023-02-14","gaps":[],"covered":["2016/2251 — RTS — Risk-mitigation techniques for OTC derivative contracts [in force] L2"],"not_covered":["national guidance","court decisions"]},"freshness":{"release_id":"a4f2a0495fe55b47323883f82977a9b34ab66171ec9623e39925d3a7045b6c81","release_published":"2026-11-01T16:41:30Z","checked_at":"2026-10-20","checked_against":"EUR-Lex"},"truncation":null,"failures":[],"incomplete":[]},"page":{"path":"/emir/level-2/rts/2016-2251-risk-mitigation-techniques-for-otc-derivative-contracts/articles/18","url":"https://www.headlesslaw.com/emir/level-2/rts/2016-2251-risk-mitigation-techniques-for-otc-derivative-contracts/articles/18","title":"Article 18 — Qualitative requirements","family":"l2_unit_view","work_id":"spaces/emir/level-2/rts/2016-2251-risk-mitigation-techniques-for-otc-derivative-contracts","view_of":"/emir/level-2/rts/2016-2251-risk-mitigation-techniques-for-otc-derivative-contracts","status":"in_force","force_status":"in_force","date_state":"current","requested_date":null,"as_of":"2026-11-01","applies_from":null,"application":null,"version_label":"Consolidated version of 14 February 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Delegated Regulation (EU) 2016/2251 · binding · OJ L 340, 15.12.2016 · dated 4 Oct 2016 [in force]","attribution":{"prepared_by":"European Commission","published_by":"Publications Office of the EU","published_in":"Official Journal of the European Union","document_type":"delegated_regulation","legal_nature":"binding_adopted","addressees":"not stated in the document","dates":{"document_date":"2016-10-04","entry_into_force":"2017-01-04","locators":{"document_date":"CELLAR 32016R2251 work_date_document","entry_into_force":"CELLAR 32016R2251 resource_legal_date_entry-into-force (earliest)"}},"adoption":null},"context":{"act":{"work_id":"spaces/emir/level-2/rts/2016-2251-risk-mitigation-techniques-for-otc-derivative-contracts","path":"/emir/level-2/rts/2016-2251-risk-mitigation-techniques-for-otc-derivative-contracts","name":"Commission Delegated Regulation (EU) 2016/2251","number":"2016/2251","celex":"32016R2251","title_official":"COMMISSION DELEGATED REGULATION (EU) 2016/2251 of 4 October 2016 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories with regard to regulatory technical standards for risk-mitigation techniques for OTC derivative contracts not cleared by a central counterparty (Text with EEA relevance)","document_date":"2016-10-04"},"position":{"kind":"article","key":"18","index":18,"articles":42,"annexes":4},"prev":{"path":"/emir/level-2/rts/2016-2251-risk-mitigation-techniques-for-otc-derivative-contracts/articles/17","key":"17","title":"Article 17 — Diversification, hedging and risk offsets across underlying classes"},"next":{"path":"/emir/level-2/rts/2016-2251-risk-mitigation-techniques-for-otc-derivative-contracts/articles/19","key":"19","title":"Article 19 — Collateral management and segregation"},"act_anchor":"#art-18"}},"provenance":{"official_url":"https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02016R2251-20230214","check":{"result":"matched","checked_at":"2026-10-20","against":"EUR-Lex"},"repo_path":"spaces/emir/level-2/rts/2016-2251-risk-mitigation-techniques-for-otc-derivative-contracts.md","unit_text_sha256":"28a86d22f12caf70c03406b435a8957fe2c2db1e15842aff11087c10e6a520d0","note":"the unit is a byte-exact part of the act page, whose check record covers it"},"unit":{"locator":"spaces/emir/level-2/rts/2016-2251-risk-mitigation-techniques-for-otc-derivative-contracts/art-18","kind":"article","key":"18","heading":"Article 18 — Qualitative requirements","text":"## <a id=\"art-18\"></a>Article 18 — Qualitative requirements\n\n1. <a id=\"art-18-p-1\"></a>Counterparties shall establish an internal governance process to assess the appropriateness of the initial margin model on a continuous basis, including all of the following:\n\n    <a id=\"art-18-p-1-a\"></a>**(a)** an initial validation of the model by suitably qualified persons who are independent from the persons developing the model;\n\n    <a id=\"art-18-p-1-b\"></a>**(b)** a follow up validation whenever a significant change is made to the initial margin model and at least annually;\n\n    <a id=\"art-18-p-1-c\"></a>**(c)** a regular audit process to assess the following:\n\n    <a id=\"art-18-p-1-c-i\"></a>**(i)** the integrity and reliability of the data sources;\n\n    <a id=\"art-18-p-1-c-ii\"></a>**(ii)** the management information system used to run the model;\n\n    <a id=\"art-18-p-1-c-iii\"></a>**(iii)** the accuracy and completeness of data used;\n\n    <a id=\"art-18-p-1-c-iv\"></a>**(iv)** the accuracy and appropriateness of volatility and correlation assumptions.\n\n2. <a id=\"art-18-p-2\"></a>The documentation of the risk management procedures referred to in point (b) of Article 2(2) relating to the initial margin model shall meet all of the following conditions:\n\n    <a id=\"art-18-p-2-a\"></a>**(a)** it shall allow a knowledgeable third party to understand the design and operational detail of the initial margin model;\n\n    <a id=\"art-18-p-2-b\"></a>**(b)** it shall contain the key assumptions and the limitations of the initial margin model;\n\n    <a id=\"art-18-p-2-c\"></a>**(c)** it shall define the circumstances under which the assumptions of the initial margin model are no longer valid.\n\n3. <a id=\"art-18-p-3\"></a>Counterparties shall document all changes to the initial margin model. That documentation shall also detail the results of the validations, referred to in paragraph 1, carried out after those changes.\n\n**SECTION 5 — Collateral management and segregation**\n\n","marks":[],"text_hash":"28a86d22f12caf70c03406b435a8957fe2c2db1e15842aff11087c10e6a520d0","revision":1}}