On page 31 of the newly updated ESMA FAQ on EMIR the  world of segregation models at CCP's for clearing OTC derivatives finds a much-anticipated clarification on the Individual Segregation Account (ISA) model. In a recent RISK article, Tom Osborn was exploring the plethora of segregation models (subs) currently being considered to be offered by the various CCP's in Europe. With regard to the ISA model, dealers have been pushing hard via ISDA and the FOA (soon to be FIA/FOA) to have a model where multiple ISAs are supported by one collateral account. That would have meant that the account at the CCP only identifies the value due to the accounts of the respective clients. The FAQ though now says:

"Accordingly it is not sufficient that the account at the CCP identifies only the value due to the account of the client. It must identify the specific assets (e.g. the particular or equivalent securities) due to the account of the client.

Alternative approaches to segregation that identify only the value due to the accounts of the clients (while recording the assets provided for the account overall) may be offered in addition, provided they meet the relevant requirements of Article 39 of EMIR, but they do not meet the requirement to offer individual client segregation."

This answer stops development of any ISA 'by value' model, which means each Clearing Member must track the delivery of assets directly into each ISA and not into a common 'pool' of collateral, a process CCPs have coined "tagging".  The last paragraph of the answer allows such a model to be called an Omnibus, but therefore depicts an LSOC style segregation model as prevalent in the US. Tom R.