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Enron Mail |
Sara,
The financial trader in Sydney should not be entering into master agreements for the trades he's doing for ENA-Houston. The master agreement should be executed by ENA in Houston. If that's not possible, our outside Australian tax advisor suggested having an independent agent (such as a lawyer) having a power of attorney from ENA and executing the trade (rather than Enron Australia). This means that if ENA has already entered into a master agreement with the same counterparty, it would need to enter into a new master agreement with that counterparty. Consequently, with respect to ENA negotiating an agreement with the Commonwealth Bank of Australia, Enron Australia will not need to execute a separate master for the trades that it is doing on behalf of ENA. In this instance, ENA is considered the principal and Enron Australia is just performing services pursuant to the services agreement it has with ENA. Please feel free to give me a call if you would like to discuss this further. Best regards, Susan Sara Shackleton@ECT 05/02/2000 06:48 PM To: Susan Musch/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: David Minns/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT Subject: Financial Trading - Enron affiliates Susan: I wanted to clarify whether Enron Australia Pty. Ltd. needs to execute ISDA Master Agreements with the SAME counterparties which already have agreements with ENA (and vice versa). As an example, I can only rely upon tax advice ENA has previously received in connection with the services agreement between ENA and ECT Canada. For book and tax purposes, the trade is recorded on the risk books of the Enron affilate ultimately booking the trade but the transaction is actually documented in the name of the Enron affiliate having the Master Agreement with the counterpary. The Enron affiliate having the Master Agreement with the counterparty then transacts with Risk Management & Trading Corp. (through a bulk swap arrangement). The credit risk remains with Risk Management & Trading Corp. (through an internal back to back transaction with the "booking" Enron affiliate) for which the "booking" Enron affiliate will presumably pay a fee pursuant to the services agreement. Consider: ENA is negotiating an agreement with Commonwealth Bank of Australia. Will Enron Australia require a separate master with Commonwealth Bank of Australia? Or will the services agreement permit the hereinabove described arrangement?
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