On February 7, 2013, the U.S. Department of Labor (“DOL”) issued Advisory Opinion 2013-01A addressing the application of certain aspects of ERISA to swap contracts subject to mandatory clearing. The Advisory Opinion covers swaps regulated by the Commodities Futures Trading Commission but does not appear to cover security-based swaps regulated by the Securities and Exchange Commission.

The Advisory Opinion provides a path forward for ERISA plans that utilize swaps subject to the Dodd-Frank Act’s mandatory clearing requirements as part of their investment strategy and eliminates most of the ERISA uncertainty for market participants in entering into swap agreements with plans. It also offers useful guidance to those who negotiate the ERISA representations and other terms in swap agreements.

View full memo, "DOL Provides ERISA Relief for Cleared Swap Transactions with Plans"