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Enron Mail |
Sally / Brent
FYI - no action required This note and an earlier email ( forwarded separately ) highlights issues around some transactions originated within Metals that arose due to 'misunderstanding' of limits - which was work in progress for Andrew Cornfield ( Risk ), Lloyd Fleming ( RAC ) and Shane Dallman ( FX desk - reporting to Gary Hickerson ) working with the Metal Commercial MDs on the subject of an exemption from Corp policy for IR and FX hedging. It is pleasing that people in the control environment picked up the issues on a timely basis but disappointing that a firm conclusion between the Commerical groups on 'delegated' limits took longer than anticipated. If you need any detail please call Mike ---------------------- Forwarded by Mike Jordan/LON/ECT on 23/11/2000 12:28 --------------------------- From: Lloyd Fleming 23/11/2000 11:58 To: Rick Buy/HOU/ECT@ECT, Michael R Brown/LON/ECT@ECT, Michael J Hutchinson/EU/Enron@Enron cc: Ted Murphy, David Port, Gary Hickerson/HOU/ECT@ECT, Mike Jordan/LON/ECT@ECT, Andrew Cornfield/LON/ECT@ECT, Tim R Jones/EU/Enron@Enron, Shane Dallmann/LON/ECT@ECT, Robert Soeldner/LON/ECT@ECT Subject: Enron Metals FX status The following issues have been resolved today following discussions with Metals Commercial, Risk Management and RAC: 5m Euro prop trade: It has been agreed that this will be closed out immediately. Metals traders will be advised that FX exposure may only be generated as part of a hedge position to an underlying metal trade, and that any FX exposure must be laid off via Roger Murray-Evans (Metals FX trader) and the Global Markets desk. Averaging trades (FX and Bullion): Change method of booking trades so that the averaging leg of all trades is booked as it arises (i.e. daily) and the resulting FX exposure is captured daily and laid off with Global Markets as part of the metals aggregation. A number of other matters, which have been under discussion for some time, were also agreed:- Euro / Ali option: Currently operates under a $30m FX limit and is managed by Tim Jones. It has been agreed that this limit will be reduced to $20m (EMRAC to approve) and be a part of Gary Hickerson's limit. As the options expire, the limit will be progressively reduced. The limit applies only to this transaction and does not cover any other FX dealing by Enron Metals. Any subsequent transactions of this nature will be covered under separately proposed limits. Overnight exposure: Enron Metals to apply for a small overnight limit to cover trades booked after the end of day cut-off. $2m total net open position has been proposed, to be agreed with Gary Hickerson and form part of his limits. FX position management: FX exposure generated through the day to be aggregated and passed to the Global Markets desk. regards Lloyd Fleming RAC Market Risk Management Ph: + 44 20 7783 4532 Mobile: + 44 7760 17 87 42
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