The Board of Governors of the Federal Reserve System proposed changes to the so-called “Volcker Rule” to simplify and capture risk more appropriately. Among other things, the changes, if adopted, (1) would divide banking entities into three categories based on the size of their trading assets and liabilities and impose different compliance requirements to each category of banking entity; (2) eliminate one of the three current elements of what currently constitutes a trading account subject to a trading prohibition – the short term intent prong – to provide an easier quantifiable measure; (3) exclude error trades and correction transactions from the prohibition against proprietary trading; and (4) amend restrictions related to market making, underwriting and certain private equity and hedge funds (so-called “covered funds”). The FRB will accept comments for 60 days following publication of its proposed changes in the Federal Register.