The Department of Labor resolved key issues related to cleared swaps transactions in a recent advisory opinion.  The opinion concludes that margin posted by an employee benefit plan in connection with a cleared swap is not a “plan asset” for purposes of ERISA, and that a Clearing Member does not act as a fiduciary of the plan when the Clearing Member exercises discretionary account liquidation rights upon the plan’s default.  The opinion also provides guidance on prohibited transaction issues raised by the clearing process.
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