CME Group Inc.'s decision to allow users of its interest-rateswap future contracts to avoid tougher oversight is drawingscrutiny from its government regulator.

The contracts, which begin as futures and are converted to swapsguaranteed by CME's clearinghouse if held until delivery, won't beincluded in totals determining whether users face highercollateral, capital and trading requirements, Laurie Bischel, a CMEspokeswoman, said. Under Commodity Futures Trading Commissionrules, traders who buy or sell more than $8 billion of swaps in ayear will face the tougher standards by being designated a dealeror so-called major-swaps participant.

“CFTC is currently reviewing this product, and we have not yettaken a view on whether the resulting swap counts toward a marketparticipant's status as a dealer or major-swap participant,” SteveAdamske, a CFTC spokesman, said in an e-mailed statement. “Marketparticipants are urged to consult the rules in order to determinewhether certain products would be in compliance with CFTC swapregulations.”