Hi,With the new CME Deliverable/ Eris Standard swap futures only having a 2-day closeout period for initial margin calculations (vs. a 5-day closeout period for cleared swaps on the CME), I'm wondering: Why is this the case?If swaps are cleared centrally, they should pose no more of a systemic risk to the financial system than futures. So why are the regulations for cleared swaps so punitive in comparison?It's not just the 2-day horizon vs 5-day horizon for initial margin calculations- it's having to report to Swap Data Repositories (SDRs) and registering as Major Swap Participants (MSPs) and Swap Delaers (SDs) as well. The explosion of acronyms alone is a sign that regulations are a lot tougher on swaps than they are on futures(!)Can anyone please share their thoughts on this?Thanks

most likely because they aren't regulated by the cftc....- cme/ice or whoever on the other hand are only interested in making money.

This is nothing but an attempt at regulatory arb by the CME. And both the futures and the underlying swaps are regulated by the CFTC.

Thanks for your thoughts. A reason I heard on the street for 2-day vs 5-day holding period is "it will take longer to auction off IR swap instruments post-default due to their non-standard nature"- but this could easily be solved by creating standard contract features (like they did for CDS), so i'm not buying it ...

Indeed. Dodd-Frank did not change the rules for futures clearing (as far as I know) but imposed all sorts of requirements for the clearing of OTC derivatives, as well as extremely punitive initial margin requirements for non-cleared OTC derivatives. Perhaps by coincidence, the new rules are very favorable to Chicago based entities at the expense of NYC based ones. And I am saying that as a representative of a buy-side organization that does not have an axe in that particular fight.