DOL Clarifies Application Of ERISA Rules To Cleared Swaps

New guidance defers to the Dodd-Frank/CFTC framework for regulating the swaps clearing process.

On February 7, the U.S. Department of Labor (DOL) issued an advisory opinion¹ on the application of the ERISA fiduciary rules to the categories of swaps subject to mandatory clearing under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). In Advisory Opinion 2013-01A, the DOL responded to questions on how the various parties to a cleared swap with an ERISA plan—specifically, the clearing member who deals directly with the plan (Clearing Member) and the central counterparty that acts as the clearing organization and ultimate swap counterparty to the plan (Clearing Organization)—would be treated under ERISA's fiduciary responsibility and prohibited transaction rules.