The financial industry and its regulators face an unprecedented task over the next few years, as they must write a wide range of important rules to implement regulatory reform, says the head on the U.S. securities industry trade association.

Speaking to the National Economists Club on Tuesday, Tim Ryan, president and CEO of the U.S. Securities Industry and Financial Markets Association, said that the industry is facing a huge task as gets around to the detailed work of implementing the reforms passed by the U.S. Congress earlier this year.

SIFMA is focusing on primarily on seven areas, he said: systemic risk; resolution authority and living wills; oversight of the over-the-counter derivatives market; securitization and the credit rating agencies; capital and liquidity standards; the future of proprietary trading and private equity under the so-called Volcker Rule; and, the creation of a federal fiduciary standard for investment advisors and broker/dealers who provide personalized investment advice to retail investors.

On the question of developing a uniform fiduciary standard, Ryan said that making sure the standard is written in a way that preserves investor choice is a tough task. “It’s writing rules about the intersection of conduct and offerings,” he said.

Additionally, as there are parallel efforts underway in Europe and the UK in most of these areas, Ryan stressed the need for global coordination to avoid regulatory arbitrage. “Our focus—everyone’s focus—must be on how we safeguard our financial system without constraining capital formation, credit availability and our industry’s ability to contribute to economic growth and job creation,” he said.

“This isn’t about simply meeting the rulemaking deadlines, it’s about getting it done right. The stakes are too high for anything less. Poorly crafted regulations that create market distortions or other unintended consequences could constrain capital formation or even increase systemic risk,” he added.

Moreover, Ryan said that SIFMA will be involved in other reform efforts, too, including reforms dealing with compensation, the regulation of hedge funds and short sales, the planned convergence of U.S. and international accounting standards, tax issues and mortgage market reforms.

“The financial industry and federal regulators are faced with an unprecedented task over the next two to five years,” Ryan concluded. “Many of the agencies tasked with making these rules are taking on responsibilities outside their historical purview; the expertise needed to get these regulations right doesn’t necessarily reside within their walls.” However, he noted that there is a robust rulemaking process in place, and that SIFMA will be part of that, providing comment on these efforts.

“We’ll be living with these regulations for decades. Let’s look back at the next two to five years as the time when we laid a foundation for growth and safety—as the time when we all got it right,” he said.

IE