re : limit violations and notifications process dear cassandra ,
thanks for the message . i believe it if fully understood by us and the
individual risk management groups that explanations must be validated by the
traders . are you in addition saying that your group ( who has been very
helpful in the past ) will no longer help us understand the cause of
violations / notifications ? to me , this appears contrary to a team spirit
attitude , and not reflective of what you and i and vlady and i had discussed
earlier today . also , we are working toward getting the memos out earlier ,
and this is a real set back to that process .
thoughts ?
to : shona wilson / na / enron @ enron , michael benien / corp / enron @ enron , chris
abel / hou / ect @ ect , daniel falcone / corp / enron @ enron
cc : veronica valdez / hou / ect @ ect , sally beck / hou / ect @ ect
subject : limit violations and notifications process
shona -
to share with the others our telephone discussion , the notification template
was not my request , it was requested directly by skilling . i know your group
is working hard to meet mangagement expectations , and in accordance with your
request below , market risk is happy to help you transition into this revised
reporting format by reviewing the template prior to your distribution until
you are comfortable with the reporting requirements . the new p / l
notification limits and limit changes that will be in effect next tuesday
should dramatically decrease the number of notifications , so that should
help . it probably makes sense to re - distribute the policy to your business
unit controllers and the traders so they understand the policy requirements .
another issue that we discussed yesterday is the source of the violation
explanations . these should be provided to you by the head trader of that
commodity group . under the policy , that commodity group manager is
responsible for compliance with the risk management policy for the
commodities under his responsibility , along with the head of the energy ops
for that commodity group . if the traders are not providing these
explanations to you or to your counterparts ( ops desk head / business unit
controller ) , i ' ll be happy to send them an e - mail explaining their compliance
obligation under the policy . why don ' t you talk to each of the business unit
controllers , consider whether a process is already in place for this feedback
( as i understand it is for global products , for example ) , and if you ' d like
me to send an e - mail to whoever you ' re having difficulty with , i will - just
let me know who . our market risk desk heads will be happy to review their
explanations , but the problem is , they can see whether they ' re short or long
and how the market moved in comparison , but it ' s the trader that can and
should explain why they took a position , whether they ' re adjusting it based
on the market moves , etc . .
let me know what else i can do to help streamline the process .
regards ,
cassandra .
- - - - - - - - - - - - - - - - - - - - - - forwarded by cassandra schultz / na / enron on 12 / 07 / 2000
09 : 48 am - - - - - - - - - - - - - - - - - - - - - - - - - - -
from : shona wilson 12 / 07 / 2000 09 : 42 am
to : cassandra schultz / na / enron @ enron
cc : michael benien / corp / enron @ enron , chris abel / hou / ect @ ect , daniel
falcone / corp / enron @ enron , veronica valdez / hou / ect @ ect , sally beck / hou / ect @ ect
subject : re : 12 / 5 limit violations and notifications - comments
dear cassandra ,
in looking at the comments below there are several errors made buy us , one in
the template itself , and some suggestions . at your request , we have started
to prepare this in addition to the normal word violation / notification memos
and our other work . as you have certain requests and requirements , it would
be helpful for someone in your group to review it before it went out to
ensure it meets your requirements .
please let me know if this is workable and who the reviewer should be .
thanks ,
shona
to : michael benien / corp / enron @ enron , chris abel / hou / ect @ ect , shona
wilson / na / enron @ enron , daniel falcone / corp / enron @ enron
cc : veronica valdez / hou / ect @ ect
subject : 12 / 5 limit violations and notifications - comments
i realize this has already gone out , but i see a few errors that we should
correct - and actually , i think we should call skilling and lay ' s ( and
buy ' s ) assistants ( veronica will handle this ) and see if we can just hand
deliver to them a corrected version early this morning , e - mail is ok for ted ,
david and i . i have a few other suggestions on format / reporting changes as
well .
the na power var of $ 51 mm was not 105 % over its var limit of $ 50 - that would
have been $ 52 . 5 to require a report to skilling , ( but if we had had to report
it , don ' t use " wscc " , try to spell out or just don ' t use )
uk gas ' s var limit is not $ 4 , it ' s $ 7 . 5 mm
i can ' t tie in uk gas ' qtd and ytd p / l - shouldn ' t it be what ' s on the dpr ,
adjusted for the portion of the structured derivatives that is gas - call
over to that yeo person and get the info . from them please
the 2 nd item for na gas shouldn ' t be listed like that as it looks like
another violation - the comment re : the var increase was mean to go at the
bottom under rac comments
the finance committe chairman notification for agg . var is not 100 % , it ' s
115 % ( notification requirement box )
ees had a var violation - $ 7 . 5 vs . 7 - that is a skilling level violation
let ' s have the " re : " say " limit violations and notifications for december 5 ,
2000 "
let ' s number them all sequentially rather than starting over at each level
veronica will call you to coordinate re - distribution .
going forward , we need to increase our level of review for these as they ' re
getting a lot of scrutiny given market dynamics and our increasing risk .
thank you ,
cassandra .
- - - - - - - - - - - - - - - - - - - - - - forwarded by cassandra schultz / na / enron on 12 / 07 / 2000
07 : 38 am - - - - - - - - - - - - - - - - - - - - - - - - - - -
michael benien
12 / 06 / 2000 07 : 08 pm
to : kenneth lay / corp / enron @ enron , rosalee fleming / corp / enron @ enron , jeff
skilling / corp / enron @ enron , sherri sera / corp / enron @ enron , rick
buy / hou / ect @ ect , karen k heathman / hou / ect @ ect
cc : cassandra schultz / na / enron @ enron , ted murphy / hou / ect @ ect , david
port / market risk / corp / enron @ enron , chris abel / hou / ect @ ect
subject : 12 / 5 limit violations and notifications
re : limit violations and notifications process
dear cassandra ,
thanks for the message . i believe it if fully understood by us and the
individual risk management groups that explanations must be validated by the
traders . are you in addition saying that your group ( who has been very
helpful in the past ) will no longer help us understand the cause of
violations / notifications ? to me , this appears contrary to a team spirit
attitude , and not reflective of what you and i and vlady and i had discussed
earlier today . also , we are working toward getting the memos out earlier ,
and this is a real set back to that process .
thoughts ?
to : shona wilson / na / enron @ enron , michael benien / corp / enron @ enron , chris
abel / hou / ect @ ect , daniel falcone / corp / enron @ enron
cc : veronica valdez / hou / ect @ ect , sally beck / hou / ect @ ect
subject : limit violations and notifications process
shona -
to share with the others our telephone discussion , the notification template
was not my request , it was requested directly by skilling . i know your group
is working hard to meet mangagement expectations , and in accordance with your
request below , market risk is happy to help you transition into this revised
reporting format by reviewing the template prior to your distribution until
you are comfortable with the reporting requirements . the new p / l
notification limits and limit changes that will be in effect next tuesday
should dramatically decrease the number of notifications , so that should
help . it probably makes sense to re - distribute the policy to your business
unit controllers and the traders so they understand the policy requirements .
another issue that we discussed yesterday is the source of the violation
explanations . these should be provided to you by the head trader of that
commodity group . under the policy , that commodity group manager is
responsible for compliance with the risk management policy for the
commodities under his responsibility , along with the head of the energy ops
for that commodity group . if the traders are not providing these
explanations to you or to your counterparts ( ops desk head / business unit
controller ) , i ' ll be happy to send them an e - mail explaining their compliance
obligation under the policy . why don ' t you talk to each of the business unit
controllers , consider whether a process is already in place for this feedback
( as i understand it is for global products , for example ) , and if you ' d like
me to send an e - mail to whoever you ' re having difficulty with , i will - just
let me know who . our market risk desk heads will be happy to review their
explanations , but the problem is , they can see whether they ' re short or long
and how the market moved in comparison , but it ' s the trader that can and
should explain why they took a position , whether they ' re adjusting it based
on the market moves , etc . .
let me know what else i can do to help streamline the process .
regards ,
cassandra .
- - - - - - - - - - - - - - - - - - - - - - forwarded by cassandra schultz / na / enron on 12 / 07 / 2000
09 : 48 am - - - - - - - - - - - - - - - - - - - - - - - - - - -
from : shona wilson 12 / 07 / 2000 09 : 42 am
to : cassandra schultz / na / enron @ enron
cc : michael benien / corp / enron @ enron , chris abel / hou / ect @ ect , daniel
falcone / corp / enron @ enron , veronica valdez / hou / ect @ ect , sally beck / hou / ect @ ect
subject : re : 12 / 5 limit violations and notifications - comments
dear cassandra ,
in looking at the comments below there are several errors made buy us , one in
the template itself , and some suggestions . at your request , we have started
to prepare this in addition to the normal word violation / notification memos
and our other work . as you have certain requests and requirements , it would
be helpful for someone in your group to review it before it went out to
ensure it meets your requirements .
please let me know if this is workable and who the reviewer should be .
thanks ,
shona
to : michael benien / corp / enron @ enron , chris abel / hou / ect @ ect , shona
wilson / na / enron @ enron , daniel falcone / corp / enron @ enron
cc : veronica valdez / hou / ect @ ect
subject : 12 / 5 limit violations and notifications - comments
i realize this has already gone out , but i see a few errors that we should
correct - and actually , i think we should call skilling and lay ' s ( and
buy ' s ) assistants ( veronica will handle this ) and see if we can just hand
deliver to them a corrected version early this morning , e - mail is ok for ted ,
david and i . i have a few other suggestions on format / reporting changes as
well .
the na power var of $ 51 mm was not 105 % over its var limit of $ 50 - that would
have been $ 52 . 5 to require a report to skilling , ( but if we had had to report
it , don ' t use " wscc " , try to spell out or just don ' t use )
uk gas ' s var limit is not $ 4 , it ' s $ 7 . 5 mm
i can ' t tie in uk gas ' qtd and ytd p / l - shouldn ' t it be what ' s on the dpr ,
adjusted for the portion of the structured derivatives that is gas - call
over to that yeo person and get the info . from them please
the 2 nd item for na gas shouldn ' t be listed like that as it looks like
another violation - the comment re : the var increase was mean to go at the
bottom under rac comments
the finance committe chairman notification for agg . var is not 100 % , it ' s
115 % ( notification requirement box )
ees had a var violation - $ 7 . 5 vs . 7 - that is a skilling level violation
let ' s have the " re : " say " limit violations and notifications for december 5 ,
2000 "
let ' s number them all sequentially rather than starting over at each level
veronica will call you to coordinate re - distribution .
going forward , we need to increase our level of review for these as they ' re
getting a lot of scrutiny given market dynamics and our increasing risk .
thank you ,
cassandra .
- - - - - - - - - - - - - - - - - - - - - - forwarded by cassandra schultz / na / enron on 12 / 07 / 2000
07 : 38 am - - - - - - - - - - - - - - - - - - - - - - - - - - -
michael benien
12 / 06 / 2000 07 : 08 pm
to : kenneth lay / corp / enron @ enron , rosalee fleming / corp / enron @ enron , jeff
skilling / corp / enron @ enron , sherri sera / corp / enron @ enron , rick
buy / hou / ect @ ect , karen k heathman / hou / ect @ ect
cc : cassandra schultz / na / enron @ enron , ted murphy / hou / ect @ ect , david
port / market risk / corp / enron @ enron , chris abel / hou / ect @ ect
subject : 12 / 5 limit violations and notifications