Mark,

I thought you might have a view on this as well.

regards
bruce
---------------------- Forwarded by Bruce Garner/Corp/Enron on 07/22/2000 
04:57 AM ---------------------------


David Forster
07/21/2000 08:43 PM
To: Bruce Garner/Corp/Enron@ENRON, Lara Fields/HOU/ECT@ECT, Edmund 
Cooper/LON/ECT@ECT, Justin Boyd/LON/ECT@ECT, Paul Simons/LON/ECT@ECT
cc: Amita Gosalia/LON/ECT@ECT, Louise Kitchen/HOU/ECT@ECT 

Subject: MG

As you know, we are looking at doing the following with MG:

1) Moving the Market Maker Application into EnronOnline - effectively, by 
putting the same products on EnronOnline as are currently on Market Maker, 
then shutting down Market Maker and putting a hyperlink in to EnronOnline

2) Launching financial metals products on EnronOnline, which would transacted 
by MG.


I have some concerns about both of these activities.


(1) Until today, I did not realise that the Market Maker application actually 
involves the transaction of an LME contract. In other words, when a customer 
buys from MG on the Market Maker app, they are buying LME contracts. We have 
taken pains to distinguish between what we do on EnronOnline - which is to 
transact on products which might settle against a published price vs. 
transacting on the actual exchange contract.  As you know, Exchange contracts 
are subject to a different set of regulations and scrutiny than currently 
applies to EnronOnline.


(2) Because MG trades Exchange contracts on the floor of the exchange, they 
are subject to more stringent regulations than Enron. I am concerned that if 
MG is transacting financial products on EnronOnline, that EnronOnline could 
come under greater scrutiny by the SFA. Paul: Can you comment on whether or 
not this is a risk?  If this is a risk, would it be mitigated by having 
another Enron company handle EnronOnline transactions (with sleeving back to 
MG), or are we already sunk by virtue of the fact that MG is now in the Enron 
family?

Comments from any/all recipients invited . . .

Thanks,

Dave
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