The $639 trillion over-the-counter derivatives market begins the largest transformation in its 30-year history today with rules intended to contain another financial crisis, trimming profits for Wall Street banks.

Companies from JPMorgan Chase & Co. to BlackRock Inc. are now required under the 2010 Dodd-Frank Act to have most of their privately negotiated swaps trades backed by a clearinghouse that's capitalized by the world's largest banks. That means dealers and their customers have to post upfront collateral to absorb losses if a firm defaults and settle daily losses.

Regulators are overhauling a market that complicated efforts to untangle the worst financial crisis since the Great Depression by obscuring how interconnected and vulnerable banks had become to each other. Executives from at least three dealers are concerned they may not be ready for a surge in cleared trades, while Sanford C. Bernstein & Co. said the rules may cut pre-tax margins at bank trading units by a third. Swaps helped produce a combined $30 billion in annual profits at the biggest dealers, consulting firm Oliver Wyman estimates.