Subject: Re: Softs business
From: [email-masked]
To: [email-masked]
Cc: [email-masked]
Date: Wed, 21 Feb 2001 04:23:00 -0800 (PST)

I am completely free on both of those dates (except for a 2 p.m. to 3 p.m. 
meeting on 2/27).  I would suggest Sara Shackleton of our legal group attend 
as well.  -- Bob

Robert E. Bruce
Senior Counsel
Enron North America Corp.
T (713) 345-7780
F (713) 646-3393
[email-masked]

	Janine Juggins@ECT
	02/21/2001 11:42 AM
		 
		 To: Robert Bruce/NA/Enron@Enron
		 cc: Catharina Clabots/LON/ECT@ECT, Stephen H Douglas/HOU/ECT@ECT
		 Subject: Softs business

I had a call with Trena McFarland today picking up on earlier discussions 
with respect to the structure for the Softs business to be conducted out of 
London and New York (please see e:mail of 2/2/01 for detailed discussion of 
the alternatives). 

Trena said that there was a strong legal preference to use ENA rather than a 
new US corporation for the trading activity conducted out of New York, and 
that ECTRIC (or EFET LLC) through EEFT would be the principal for UK trading 
activity. I understand that the rationale is centred on minimising the number 
of ISDAs to be negotiated. I further understand that the overlap in the 
counterparty base (Softs and existing customers) is not significant at this 
time although it is hoped that this will change over time. 

As a result of this Trena is considering establishing parallel books such 
that, for example, the London based traders would offer prices on NYBOT 
look-alike and the NYBOT/LIFFE spread trades as well as offering prices on 
the LIFFE look-alike trades. European counterparties would only be given 
access rights via EOL to trade the products offered by London, and N American 
counterparties would only be given access rights via EOL to trade the 
products offered by New York. The price stack managers for the products will 
be separately controlled by each group of traders. The trouble with this 
route is that there is the possibility of arbitrage since the products will 
have overlapping hours of trading. The possibility of arbitrage would be 
restricted to those counterparties which are registered both with London and 
New York via EOL and are thus able to see both prices with a bit of collusion 
- this would be most likely in the case of a global counterparty which is 
operating through one or more branches.

This is only a very brief summary of the discussion and the issue, because I 
would like to follow up in more detail in person when I am in Houston next 
week. Would you have any time free on Tuesday 27 Feb or Friday 2 March to 
discuss this (together with ENA Tax) ?

Thanks
Janine