Foreign Exchange from a US entity

----- Forwarded by Sara Shackleton/HOU/ECT on 08/14/2000 03:31 PM -----

Trena McFarland
08/10/2000 10:02 AM

To: Sara Shackleton/HOU/ECT@ECT, Donna Lowry/HOU/ECT@ECT
cc:
Subject: Foreign Exchange from a US entity

---------------------- Forwarded by Trena McFarland/LON/ECT on 10/08/2000
16:02 ---------------------------

Jon Barrett@MGLTD
01/08/2000 12:35
To: GILBERGD@SULLCROM.COM
cc: Janine Juggins/LON/ECT@ECT, Andrew Cornfield/LON/ECT@ECT, Trena
McFarland/LON/ECT@ECT, Paul Simons/LON/ECT@ECT, Kevin
Rhodes/MGLTD_London/MGLTD@MGLTD

Subject: Foreign Exchange from a US entity

David

Further to our recent telephone conversation, we would be grateful if you
would give us a brief written summary on the regulatory and/or legal issues
governing a US corporation transacting foreign exchange with US and non-US
customers. My basic understanding of our telephone conversation was that, as
a non-bank, neither the Fed, the SEC nor the CFTC have any jurisdiction.
However the Commodities Exchange Act prohibits us from contracting with
certain types of counterparties.

The potential business we are looking at currently covers outright foreign
exchange with counterparties such as banks, securities houses, funds,
corporates and, possibly, high net worth individuals. The business also
covers the provision of EFP facilities for these customers whereby they
ultimately receive a currency futures position on the IMM division of the CME
or on FINEX. This latter area is one where, from the Exchanges' points of
view, we would effectively be acting as an executing broker.

I hope this brief description is enough for you to be able to respond but if
you have any questions or would like further clarification, you can contact
me by e-mail or by telephone on +44 20 7265 5421.

Thank you for your help in this.

Kind regards.

Jon Barrett