Re: FX Transactions

----- Forwarded by Sara Shackleton/HOU/ECT on 08/14/2000 03:28 PM -----

Trena McFarland
08/10/2000 10:05 AM

To: Sara Shackleton/HOU/ECT@ECT, Donna Lowry/HOU/ECT@ECT
cc:
Subject: Re: FX Transactions

---------------------- Forwarded by Trena McFarland/LON/ECT on 10/08/2000
16:07 ---------------------------

Jon Barrett@MGLTD
10/08/2000 06:38
To: Justin Boyd/LON/ECT@ECT
cc: Trena McFarland/LON/ECT@ECT, Mark Taylor/HOU/ECT@ECT, Alan
Aronowitz/HOU/ECT@ECT, Marcus Nettelton/NA/Enron@ENRON, Kevin
Rhodes/MGLTD_London/MGLTD@MGLTD, Alfred Pennisi/NYC/MGUSA@MGUSA, Tim
Poullain-Patterson/LON/ECT@ECT

Subject: Re: FX Transactions

Justin

Our understanding is that FX traded from the US is effectively unregulated.
If we use MG London Inc, there would be the possibility that the CFTC would
have some type of oversight on the unregulated business. Only the posting of
the IMM EFPs needs to be done through the FCM.

There are other practical issues here in that that MG London Inc currently
lacks the infrastructure needed to do the outright FX business as it has no
bank FX lines and no bank accounts for all the currencies. There are other
issues where the main settlements/back office expertise is here in London.
These are obviously not insurmountable but we need to do a lot of work to get
either MG London Inc or, for example, MG Newco Inc ready for the business. Is
there an angle for using Enron North America, for example, as I understand
they already have existing FX lines and settlements or would that be a
non-starter? There are currently some UK and EU customers on Wolff's books
who would need to be routed via an SFA regulated arranger. Will we be able to
use EEFT for this?

Rgds

Jon

Justin Boyd@ECT
09/08/2000 18:54
To: Jon Barrett/MGLTD_London/MGLTD@MGLTD
cc: Trena McFarland/LON/ECT@ECT, Mark Taylor/HOU/ECT@ECT, Alan
Aronowitz/HOU/ECT@ECT, Marcus Nettelton/NA/Enron@ENRON

Subject: Re: FX Transactions

Jon,

I had a glance over the written paper from Sullivan & Cromwell as to FX
Transactions, and it seems to me that there would be fewer US regulatory
issues (should there be any), if we were to use MG Brokers Inc, the FCM
entity. Are there any other reasons why we would not want to use this entity?

[Mark/Alan/Marcus - I have separately sent you by email the Sullivan &
Cromwell paper]

Thanks.
Justin

---------------------- Forwarded by Justin Boyd/LON/ECT on 09/08/2000 18:49
---------------------------

Jon Barrett@MGLTD
09/08/2000 16:37
To: Justin Boyd/LON/ECT@ECT, Janine Juggins/LON/ECT@ECT
cc: Trena McFarland/LON/ECT@ECT, Kevin Rhodes/MGLTD_London/MGLTD@MGLTD, Sid
Tipples/MGLTD_London/MGLTD@MGLTD, Andrew Cornfield/LON/ECT@ECT

Subject: Re: FX Transactions

---------------------- Forwarded by Jon Barrett/MGLTD_London/MGLTD on
09/08/2000 16:36 ---------------------------
From: Alfred Pennisi@MGUSA on 09/08/2000 06:50 EDT
To: Jon Barrett/MGLTD_London/MGLTD@MGLTD
cc:

Subject: Re: FX Transactions

Jon,

My suggestion would be for the FX business be run out of a NON FCM firm in
the states (NY) since it is a non-regulated product.

If you have an questions please call me at x5845.

regards,

Alfred Pennisi
MG London Inc.
520 Madison Avenue
28th Floor
New York, NY 10022
Tel: 212.715.5845
E-mail: alfred.pennisi@mglondon.com