the rules that help protect consumers from unauthorized transactions and the various reporting and notice requirements associated with electronic funds transfers that must be made to consumers. the card associations and private - sector rulemaking organizations complement these regulatory protections and disclosure requirements by offering additional rights, protections, and notices. for example, the card associations provide consumers with " zero liability " for certain unauthorized credit and debit card transactions that are processed on their networks. while the private sector plays an important supplemental role in the area of consumer protections and notices, the federal reserve has become increasingly active in this area. for example, we have clarified that consumers have the same general rights under regulation e ( electronic funds transfers ) when their payments are made via electronic check conversion as they do when they pay their mortgage automatically each month. we also are considering how to address concerns about the notices that consumers receive when their checks are converted to electronic payments. we have found that the quality of these notices varies tremendously, creating some confusion among consumers about what they are authorizing. the board is considering whether to revise the commentary to regulation e to include model language that could be used in these consumer notices. we are also considering whether to require, along the lines of current industry rules, a written authorization signed by the consumer when the check is converted at a merchant location. i expect that the need for further clarification of regulations by the federal reserve will only grow as more innovation occurs within the payments system. an important conclusion from this discussion is that the role of the private sector is growing. this is happening in all segments of the payments system, from providing payments services, to setting industry rules or establishing industry technical and operational standards, to providing consumer rights and protections. nevertheless, the federal reserve will continue to have an important role within a more - electronic payments system. we will continue to monitor developments within the payments system to better understand their implications. as a policymaking body, we will continue to promote the integrity and safety of the payments system while also supporting improvements in efficiency and accessibility. we will facilitate private - sector efforts to improve the payments system through a combination of dialogue and leadership. where appropriate, we will work cooperatively with the private sector to identify and remove regulatory barriers to innovation and efficiency within the payments system. and, finally, when necessary, the federal reserve will act as a catalyst to greater efficiency, safety, and accessibility within the payments system. i would be happy to answer any questions you may have.

apply, in general, to insured depository institutions ; companies that control an insured depository institution ; and foreign banks with a branch, agency, or subsidiary bank in the united states, as well as to an affiliate of one of these entities. under the statute, proprietary trading is defined as taking a position as principal in any security, derivative, option, or contract for sale of a commodity for future delivery for the purpose of selling that position in the near term or otherwise with the intent to resell to profit from short - term price movements. the statute applies only to positions taken by a banking entity as principal for the purpose of making short - term profits ; it does not apply to positions taken for long - term or investment purposes. moreover, the statute contains a number of exemptions, including for underwriting, market making - related activities, and risk - mitigating hedging activities. the implementing rule proposed by the agencies incorporates all of these statutory definitions and exemptions. the statute also authorizes the relevant regulatory bis central bankers ’ speeches agencies to permit additional activities if they would promote and protect safety and soundness of the banking entity and the financial stability of the united states. the second major prohibition in the statute forbids any banking entity from acquiring or retaining an ownership interest in, or having certain relationships with, a covered fund. again, the statute contains a number of exceptions, including for organizing and offering a covered fund, making limited investments in a covered fund, sponsoring and investing in loan securitizations, and risk - mitigating hedging activities. the statutory definition of a fund covered under the volcker rule is quite broad. the statute also quite broadly prohibits any banking entity that serves as the investment manager, adviser, or sponsor to a covered fund, or that organizes and offers a covered fund, from engaging in certain transactions with the fund, including lending to, or purchasing assets from, the fund. the statute also prohibits otherwise permissible trading and investment activities when there is a material conflict of interest with customers, clients, or counterparties, or when the activity results in an exposure to high - risk assets or trading strategies. these are significant provisions and the agencies have specifically solicited comment on disclosure requirements and other approaches to implementing these parts of the statute. differentiating proprietary trading from market making one of the more difficult tasks in implementing the statutory prohibitions is distinguishing between prohibited proprietary trading activities and permissible market - making activities. this distinction is