Subject: Re: OSLO UPDATE
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked], [email-masked], [email-masked]
Date: Sat, 5 Dec 1998 09:30:00 -0800 (PST)

Paul,

Let's discuss the translation issue mentioned in 3 below. Complying with our 
translation policy shouldn't be that burdensome in the trading area because 
we use the NPTA terms and conditions (without deviation) for almost all of 
our OTC trades. As you know, we have certified translations of all the NPTA 
documents and have also received translations of all the broker confirms that 
are used as well. Please come by to discuss this when you have a chance. 
Thanks!

Scott

Paul Simons
30/11/98 20:07
To: Mark E Haedicke/HOU/ECT@ECT, Alan B Aronowitz/HOU/ECT@ECT, Jeffrey T 
Hodge/HOU/ECT@ECT, Scott Sefton/LON/ECT@ECT, Mark - ECT Legal 
Taylor/HOU/ECT@ECT
cc:  
Subject: OSLO UPDATE

I thought you'd be interested to see some of the highlight points which 
emerged from my trip last week to Oslo:

1.  NordPool trades are now cleared by its new clearing house. It is also 
possible for OTC power trades to be cleared through the clearing house, where 
both parties to the trade are members of the exchange. 80% of Enron's trades 
are cleared in this way (far higher than average in the Nordic market), 
dramatically reducing counterparty credit risk.

2. CAD 2 - this is the EU Directive which, when implemented in Norway, could 
(for the first time) subject our trading business to substantial regulatory 
capital requirements.  A committee has been set up to make proposals on CAD 
2's implementation.  These will be published in June 1999. We have at least 
one good contact on the committee who, according to Thor Lien, could help us 
achieve our goal (i.e. little or-better still-no regulation). I'll pursue 
this with Thor and keep Regulatory Affairs in the loop.

3.  NPTA published new Asian Option Terms this autumn (fall!).  Martin has 
agreed to have these translated into English for us.  More generally, Martin 
is using all efforts to comply with the translation policy, but I sense it is 
not an easy policy to comply with (although Oslo office's contracts are 
fairly standardised, they are all in Norwegian) and is proving costly 
(trading margins in Oslo are currently tight).

4.  New mid-market desk - this is being set up with a primary goal of cutting 
out brokers from trades (most trades in Oslo are brokered). The desk will 
trade in both standardised and non-standardised OTC contracts and should 
provide a useful source of market information.

5.  Weather Derivatives - These are probably still a little way off.  They 
will be based on precipitation, not on temperature. Norwegian counsel have 
confirmed their enforceability (in particular, that they will not constitute 
contracts of insurance).

I'd very much welcome your feedback on any of this.

Best regards

Paul