re : trading v origination offices i agree with the exception of point 3 below . i plan for them to be one of
several authorisers of bills ( in no case however , the only authorisers ) .
also , i spoke to sally about the " agency " office and she agrees that in the
short term , the agency plan is what we need to implement . however , a
mentioned by both ted and sally , we need to discuss what the ultimate goal is
for these offices ( will they continue to exist ? ) . let ' s call what we plan to
implement now " phase i " .
best regards
to : richard sage / lon / ect @ ect
cc : sally beck / hou / ect @ ect , brent a price / hou / ect @ ect , fernley
dyson / lon / ect @ ect , mike jordan / lon / ect @ ect , shona wilson / na / enron @ enron , ted
murphy / hou / ect @ ect , naomi connell / lon / ect @ ect
subject : re : trading v origination offices
thanks - i think this is a good start as far as roles go , but as i outlined
to shona last week , we should apply some basic rules to the process , ( forgive
me if obvious ) for example :
rule 1 : no confirmations issued , chased or matched by remote offices
this should be done centrally and further all the customers of the remote
office should be given contact numbers ( e . g . fax ) at the operations hub . that
way any incoming confirmations etc go to the independent ops group .
rule 2 : no cash payments or receipts in respect of transactions approved or
reconciled by remote offices
operations hubs should reconcile cash movements to changes in position .
rule 3 : no physical settlements or receipts in respect of transactions
approved or reconciled by remote offices
this splits the logistics process somewhat , but is essentially as with cash
in that every movement of physical product should be approved ( where
necessary ) and reconciled to movements in the position at operations hubs .
the " initiation / optimisation " aspect of logistics could remain remote , since
arguably it involves pseudo - trading .
not exhaustive but helpful i hope .
dp
richard sage @ ect
08 / 21 / 2000 03 : 40 am
to : sally beck / hou / ect @ ect , brent a price / hou / ect @ ect
cc : fernley dyson / lon / ect @ ect , mike jordan / lon / ect @ ect , shona
wilson / na / enron @ enron , ted murphy / hou / ect @ ect , david port / market
risk / corp / enron @ enron , naomi connell / lon / ect @ ect
subject : trading v origination offices
sally , brent ,
there are three mg offices in north america outside new york which , previous
to the acquisition by enron , acted much as trading offices .
shona and naomi have worked with the people in new york to put in place extra
controls so that they are not trading offices , for example having a trader in
new york or london own each book and sign off on profit daily .
this process has highlighted the fact that our non - trading offices are not
all the same , and cannot reasonably all be the same .
some offices organise logistics things to happen on the ground , some
originate , and some execute for trading offices .
is a suggestion for how we can make this division explicit .
all the cc above are bought in to this approach .
what do you require to be comfortable so that we can put it up to causey and
buy ?
it is worth noting that this approach would have caught helsinki , except for
the contract - in - a - bottom - drawer , but no system of control can reliably catch
that , as was evidenced by eott .
thanks ,
richard
re : trading v origination offices
i agree with the exception of point 3 below . i plan for them to be one of
several authorisers of bills ( in no case however , the only authorisers ) .
also , i spoke to sally about the " agency " office and she agrees that in the
short term , the agency plan is what we need to implement . however , a
mentioned by both ted and sally , we need to discuss what the ultimate goal is
for these offices ( will they continue to exist ? ) . let ' s call what we plan to
implement now " phase i " .
best regards
to : richard sage / lon / ect @ ect
cc : sally beck / hou / ect @ ect , brent a price / hou / ect @ ect , fernley
dyson / lon / ect @ ect , mike jordan / lon / ect @ ect , shona wilson / na / enron @ enron , ted
murphy / hou / ect @ ect , naomi connell / lon / ect @ ect
subject : re : trading v origination offices
thanks - i think this is a good start as far as roles go , but as i outlined
to shona last week , we should apply some basic rules to the process , ( forgive
me if obvious ) for example :
rule 1 : no confirmations issued , chased or matched by remote offices
this should be done centrally and further all the customers of the remote
office should be given contact numbers ( e . g . fax ) at the operations hub . that
way any incoming confirmations etc go to the independent ops group .
rule 2 : no cash payments or receipts in respect of transactions approved or
reconciled by remote offices
operations hubs should reconcile cash movements to changes in position .
rule 3 : no physical settlements or receipts in respect of transactions
approved or reconciled by remote offices
this splits the logistics process somewhat , but is essentially as with cash
in that every movement of physical product should be approved ( where
necessary ) and reconciled to movements in the position at operations hubs .
the " initiation / optimisation " aspect of logistics could remain remote , since
arguably it involves pseudo - trading .
not exhaustive but helpful i hope .
dp
richard sage @ ect
08 / 21 / 2000 03 : 40 am
to : sally beck / hou / ect @ ect , brent a price / hou / ect @ ect
cc : fernley dyson / lon / ect @ ect , mike jordan / lon / ect @ ect , shona
wilson / na / enron @ enron , ted murphy / hou / ect @ ect , david port / market
risk / corp / enron @ enron , naomi connell / lon / ect @ ect
subject : trading v origination offices
sally , brent ,
there are three mg offices in north america outside new york which , previous
to the acquisition by enron , acted much as trading offices .
shona and naomi have worked with the people in new york to put in place extra
controls so that they are not trading offices , for example having a trader in
new york or london own each book and sign off on profit daily .
this process has highlighted the fact that our non - trading offices are not
all the same , and cannot reasonably all be the same .
some offices organise logistics things to happen on the ground , some
originate , and some execute for trading offices .
is a suggestion for how we can make this division explicit .
all the cc above are bought in to this approach .
what do you require to be comfortable so that we can put it up to causey and
buy ?
it is worth noting that this approach would have caught helsinki , except for
the contract - in - a - bottom - drawer , but no system of control can reliably catch
that , as was evidenced by eott .
thanks ,
richard