Buy Side Backs Bloomberg Margin Request | Makes No Sense
All this debate on the appropriate holding period for futures, swaps or their hybrids, would be avoided if the CFTC and other regulators developed an approach that obliged each DCO (CCP) to provide empirical evidence for the product and market they wish to clear. This evidence would include trading data, portfolio data from market markers, the default process description, and dry runs of the default process off-line.
It is entirely wrong for the holding period for a market/product to be set without such evidence, either from a DCO, or from the CFTC themselves. The current approach by the CFTC is opaque – how did they arrive at their current (arbitrary) decisions for futures versus swaps? Lets see their method, their data and their explanation and prove to the market, the results make sense.