U.S. financial regulators finalized the rules today that will implement the controversial Volcker rule, which aims to insulate taxpayers from the prospect of bank bailouts due to high-risk proprietary trading activities.

Five federal agencies issued final rules to implement the so-called Volcker rule, which is named after former U.S. Federal Reserve chairman, Paul Volcker, who advocated the idea. The rule aims to prohibit insured depository financial institutions, and companies affiliated with these institutions, from engaging in short-term proprietary trading of certain securities, derivatives, commodity futures and options on these instruments. The final rules also impose limits on firms’ investments in, and other relationships with, hedge funds or private equity funds.

The Fed notes that the final rules provide exemptions for certain activities, including market making, underwriting, hedging, trading in government obligations, insurance company activities, and organizing and offering hedge funds or private equity funds. The final rules also clarify that certain activities are not prohibited, including acting as agent, broker, or custodian.

The compliance requirements vary based on the size of the firm and the scope of activities conducted. Firms with significant trading operations will be required to establish a detailed compliance program, and their CEOs will be required to attest that the program is reasonably designed to achieve compliance with the final rule, the Fed says. Whereas, smaller, less-complex firms must adhere to less stringent compliance and reporting requirements.

The Fed also announced that banks will be required to fully conform to the rule’s requirements by July 21, 2015.

The U.S. industry trade association, Securities Industry and Financial Markets Association (SIFMA), continues to express concerns about the rule’s ultimate impact on the industry. “It is imperative that the final Volcker Rule does not unnecessarily restrict market making or a firm’s ability to hedge risks in the effort to clearly define prohibited proprietary trading activities,” said SIFMA president, Kenneth Bentsen, Jr.

“As the rule is contained in a 900 page document, SIFMA will review the final document in detail with our members and provide further comments,” he added, noting that some firms have already taken steps to prepare for implementation of the rule. “Many firms have been working to meet the spirit and purpose of the rule by curtailing activities that would be clearly prohibited proprietary trading. Additionally, firms have begun the process of reducing positions in entities that are clearly a private equity fund or hedge fund,” he said.