UBS will allow full and complete netting for all commodity derivatives done under and ISDA Master Agreement.  They will not allow netting of commodity transactions with other financial transactions (such as interest rate or f/x deals).  Unfortunately, the big limitation for us is that we will not be able to net between physical and financial exposures.  So transactions under an Enfolio physical gas master will not net with derivatives under an ISDA .

 -----Original Message-----
From: 	Sturm, Fletcher J.  
Sent:	Tuesday, February 05, 2002 7:54 AM
To:	Taylor, Mark E (Legal)
Subject:	Netting under ISDA

Mark,

I posed this question to Mark Haedicke last week and he suggested I ask you:  Will UBS allow counterparties that enter into an ISDA with UBS to net exposure between financial Gas and Power positions when calculating margin requirements?  If so, to what extent, and if not, why?  This would be a major selling point when we're trying to establish relationships with new trading partners and trying to build our financially traded products business.  Please help.  Thanks,

Fletch Sturm
x 3-9684
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