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Enron Mail |
Hadn't really thought about that. In each contract, counterparty reps and
warrants that it physically handles each commodity on which an option is traded (tracking "trade option" regulatory language), and all r&w's are deemed repeated each time a new transaction is entered into. The law requires that on offeror have a "reasonable basis" to believe that offeree is physically handling, so traders/marketers in the ag area must be trained to not ignore obvious indications that an ag counterparty is no longer in the business of physically moving a given ag commodity. Such indications should be reported to legal department. This will be of heightened concern in the ag area. With other commodities, if the counterparty doesn't handle, or stops handling the commodity, we can always argue that we are the "offeree" and we are physically handling. Until we are physically handling ag commodities, though, we will always have to rely on the counterparty being a physical merchant in order to trade options Robert E. Bruce Senior Counsel Enron North America Corp. T (713) 345-7780 F (713) 646-3393 robert.bruce@enron.com Mark.E.Haedicke@enron.com 10/20/2000 03:15 PM To: Robert.Bruce@enron.com cc: Subject: Re: It looks good to me. How do we keep up with changes in a counterparty's business? What if it no longer physically handles a particular commodity? Mark Robert Bruce@ENRON To: Mark E Haedicke/HOU/ECT@ECT Sent by: cc: Mark Taylor/HOU/ECT@ECT Robert Subject: Bruce@ENRON 10/17/2000 06:21 PM per my voice message to you; have tried to make memo brief (See attached file: Haedicke et al 101700.doc) Robert E. Bruce Senior Counsel Enron North America Corp. T (713) 345-7780 F (713) 646-3393 robert.bruce@enron.com - Haedicke et al 101700.doc
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