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Enron Mail |
Cc: linda.robertson@enron.com, lisa.yoho@enron.com, richard.shapiro@enron.com,
larry.decker@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable Bcc: linda.robertson@enron.com, lisa.yoho@enron.com, richard.shapiro@enron.com, larry.decker@enron.com X-From: Long, Chris </O=ENRON/OU=NA/CN=RECIPIENTS/CN=NOTESADDR/CN=424B0C48-8C7DAEC-862566B9-7ADE4F< X-To: Steffes, James D. </O=ENRON/OU=NA/CN=RECIPIENTS/CN=JSTEFFE< X-cc: Robertson, Linda </O=ENRON/OU=NA/CN=RECIPIENTS/CN=NOTESADDR/CN=E6F34021-58C07703-86256984-56518C<, Yoho, Lisa </O=ENRON/OU=NA/CN=RECIPIENTS/CN=NOTESADDR/CN=42A32FEE-6C57678-86256999-750A30<, Shapiro, Richard </O=ENRON/OU=NA/CN=RECIPIENTS/CN=RSHAPIRO<, Decker, Larry </O=ENRON/OU=NA/CN=RECIPIENTS/CN=NOTESADDR/CN=82144FB7-10065F19-86256A2D-5735F1< X-bcc: X-Folder: \JSTEFFE (Non-Privileged)\Steffes, James D.\CFTC X-Origin: Steffes-J X-FileName: JSTEFFE (Non-Privileged).pst Jim - This is the issue that I left the v-mail on when you were in London. = I think that an internal group call is a great idea. I will be on the cal= l on Monday and plan to participate on Wednesday via conference call. I c= an be available to be in New York if necessary.=20 Ken Raisler, with Sullivan and Cromwell in New York, brought this to my att= ention in late June. Ken and I worked on the swap language as part of the= Commodities Futures Modernization Act (CFMA) last year and Linda Robertson= and Larry Decker worked on the issue from the Department of Treasury. We have worked closely with Mark Taylor and his colleagues in legal on thes= es issues. I sat in on a call with the commercial team last week to see what sort of r= etail swap products we would offer, if we decide to offer any. Attached ar= e their preliminary product offerings which are being reworked. =20 At the time the CFMA passage, Enron did not anticipate entering the retail = swap market. The issue of retail swaps was quite controversial and was one= of the primary issues that delayed passage of the CFMA. Because of the co= ntroversy, the final language in the Act requires the Commodity Futures Tra= ding Commission (CFTC), the Board of the Governors fo the Federal Reserve, = (the Fed), the Securities and Exchange Commission (SEC), and the Secretary = of Treasury to study the issues associated with the offer and sale of retai= l swap products and report no later than a year after passage ( by the end = of 2001). The request to interview Enron came from the CFTC. On August 2,= 2001 the CFTC, Fed, SEC, and Treasury (the FDIC and the Office of the Comp= troller of the Currency will also participate) will interview 7 or 8 partie= s at the Federal Reserve Bank of New York. I know that ISDA and AIG have = been requested to interview, and assume Morgan Stanley, Goldman Sachs, JP M= organ are among the others. We have agreed to the interview and understan= d the responses will be confidential. I will fax you the request lette= r so you can see the questions that they want addressed. CONCERNS: 1) Likely the other entities that are being interviewed are regulated...we= must not say anything which would indicate that our current business needs= further regulation. 2) We had a significant victory in the much lauded Swap exemption, which p= rovides an exemption from the CEA for energy and metal swaps, except in cas= es of fraud and manipulation. I do NOT want to have to reopen the CEA with= amendments, because the current political environment could lead to a loss= of or meddling in the current exemption. 3) I am concerned that any indication of offering retail swaps on EnronOnl= ine, could lead to a greater interest in regulation of EnronOnline. 4) Retail swaps will be regulated, likely by the CFTC. Are we prepared to= enter a regulated business? Is there regulatory creep into our existing b= usiness? Do we have other regulators take greater interest in Enron activi= ties? It may be too late for this last question. Look forward to talking more about this. =20 =09James D Steffes/ENRON@enronXgate 07/20/2001 09:26 AM =09 To: Chris Lon= g/Corp/Enron@ENRON, Lisa Yoho/NA/Enron@Enron cc: Linda Robertson/NA/Enron@= ENRON, Richard Shapiro/ENRON@enronXgate, Vicki Sharp/HOU/EES@EES Subject: = CFTC Request for Information on Retail Swaps for Enron Direct Customers=09 Chris & Lisa -- EES has been requested by the CFTC to present at a closed-door session on t= he matter of retail swaps for energy products to small customers (dry clean= ers, etc.). The meeting with the CFTC is scheduled to be on Aug 2. Right = now Scott Gahn (the head of Enron Direct USA) is scheduled to testify. =20 Vicki Sharp has scheduled some meetings prior to this to make sure that Enr= on has its story straight. The key question is whether or not Enron would = accept "regulation" by the CFTC for purposes of swaps to these customers. = =20 The first meeting would be a phone call on Monday at 10am (CST) to open dis= cussions. The second meeting would be a hands-on discussion on Wednesday b= eginning at 8am (CST). I think that both Lisa and Chris should attend both= meetings to make sure that we understand the politics and risks. One key = question is whether or not the CEA (as it currently stands) would allow thi= s activity. Please let me know if this works for everyone. Jim
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