FX Business

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