U.S. Approves $6.8 Trillion in Pension Funds for Cleared Swaps
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The U.S. Labor Department said $6.8 trillion in pension funds can be invested in cleared swap transactions as long as certain conditions are met.
The market for privately negotiated derivatives, with $639 trillion in notional value as of June, is being regulated for the first time in its three-decade history, requiring most trades to be backed by a clearinghouse where banks and brokers act as intermediaries. The Labor Department already allows pension funds to be invested in futures contracts under similar guidelines, said Supurna VedBrat, co-head of market structure and electronic trading at BlackRock Inc.