RE: E-commerce and steel

1. EnronOnline is not an exchange, it is a bilateral transaction system. It differs from futures exchanges in many respects including the following: (i)an Enron entity is a counterparty to every transaction concluded over the system; (ii) EnronOnline transactions are not cleared; (iii) the transactions concluded on the system are forward contracts or derivatives, not futures; and (iv) access to EnronOnline is restricted to commercial entities, i.e. no retail transactions are concluded on EnronOnline.

3. EnronOnline transactions are not cleared through any third party mechanism. Enron evaluates the credit of its customers and determines how much credit exposure it is willing to take with respect to each of them.

-----Original Message-----
From: Yoho, Lisa
Sent: Friday, August 10, 2001 11:12 AM
To: Taylor, Mark E (Legal)
Subject: FW: E-commerce and steel

Mark: Could you (or someone in your group) help with questions 1 and 3? Thanks so much. Lisa

-----Original Message-----
From: Murray, Julia
Sent: Monday, August 06, 2001 4:17 PM
To: Yoho, Lisa; Taylor, Mark E (Legal)
Cc: Hermans, Greg
Subject: FW: E-commerce and steel

The attached is a request that we received from the U.S. Trade Commission in connection with the pending 201 proceeding. We need to coordinate a response. Please review and I will coordinate a meeting to discuss. Thanks, Julia

-----Original Message-----
From: Hermans, Greg
Sent: Monday, August 6, 2001 1:36 PM
To: Murray, Julia
Subject: FW: E-commerce and steel

as per phonecall...

Let's discuss
Greg

-----Original Message-----
From: Vincent DeSapio [mailto:desapio@usitc.gov]
Sent: Monday, August 06, 2001 12:39 PM
To: Hermans, Greg
Subject: E-commerce and steel

Dear Mr. Hermans:
The following are the questions I referred to in the the phone message of
August 6.

1. In what significant ways does Enron Online differ from the London Metal
Exchange or the New York Mercantile Exchange in the trading of futures
contracts (apart from the specific metals it trades) or from other on-line
exchanges in the trading of physical metal?

2. What are the most important benefits that a public exchange like Enron's
brings to the steel industry?

3. Does Enron have a trade clearing mechanism to guarantee the
creditworthiness of suppliers and customers?

4. Why have some on-line steel trading sites failed?

5. Are there particular problems in trading steel on-line versus oil,
agricultural products, or any of the other products that are successfully
traded on-line?

Any information you are able to supply would be greatly appreciated.

Vincent DeSapio

U.S. International Trade Commission

500 E. Street, SW

Washington, DC 20436

202-205-3435 (phone)