A definition of swaps required by the Dodd-Frank Act andapproved by U.S. regulators will bring government scrutiny to a$648 trillion global market that has been largely unchecked sinceit emerged three decades ago.

The U.S. Commodity Futures Trading Commission and SecuritiesExchange Commission, the agencies charged with overhaulingfinancial regulation following the 2008 credit crisis, laid out forthe first time when interest-rate, credit, commodity and otherderivatives will be considered swaps. The designation approvedyesterday activates rules to increase collateral requirements andbolster public trading of the products by companies such asJPMorgan Chase & Co., Goldman Sachs Group Inc. and CargillInc.

“This is significant to the American public because now we willbring transparency to these markets,” CFTC Chairman Gary Genslersaid yesterday in a Bloomberg Television interview after thecommission met in Washington. “We will have dealers registering. Wewill lower the risk to the American public. Congress said furtherdefine a term. We further defined it. Two months from now a lot ofDodd-Frank comes into being.”