Subject: FX Business
From: [email-masked]
To: [email-masked], [email-masked]
Cc: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Date: Thu, 10 Aug 2000 04:41:00 -0700 (PDT)

Gary, Trena,

The key points are:

1. Any FX business conducted from London must in most cases be done by or 
through a specifically authorised SFA-regulated entity.  None of the MG 
London entities is authorised to conduct this type of business.  The choices 
therefore are:

- Set up a new SFA-regulated entity specifically authorised to carry on this 
type of business (up to 6  months to implement)

- Change the current authorisation of the regulated MG London entities to 
permit this type of business (this would involve a material change to its 
current  authorisation )

- Consider using Enron Europe Finance & Trading Limited ("EEFT"), which is 
SFA-regulated.  However, the approval of SFA would be required to   extend 
the scope of its current SFA authorisation to include this type of 
business.   Note also that EEFT Enron Europe Finance & Trading Limited   
currently acts as agent only and not as principal - this is primarily for 
regulatory capital reasons for unregulated entity.  Any proposed extension 
of   EEFT's current authorisation must also be carefully considered in the 
light of the potential increased risk of consolidated supervision from a 
regulatory  capital perspective.

2. Enron carries on all of its current investment business with commercial 
enterprises, and not private individuals.  And there are good reasons for 
this.  From a legal and regulatory perspective, this exposes Enron to fewer 
potential risks and to a significantly lower degree of regulatory 
compliance.  If Enron were to carry on this business with private 
individuals, this would materially increase the level of regulatory 
compliance; it also may give the individual additional rights of recourse 
against Enron for breach of its regulatory duties, and could also expose 
Enron to a greater risk of potential claims as to existence of a special or 
fiduciary relationship between itself and the private individual.  There 
would therefore need to be an overwhelming commercial rationale to support 
the decision to take on private individuals as customers.

Justin