----- Forwarded by Alan Aronowitz/HOU/ECT on 09/08/2000 03:46 PM -----

	Sheila Glover
	08/17/2000 03:24 AM
		 
		 To: Susan Musch/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
		 cc: Darren Delage/HOU/ECT@ECT, Alan Aronowitz/HOU/ECT@ECT, Clara 
Carrington/HOU/ECT@ECT
		 Subject: Re: Enron Japan Trading and Enron Global Markets LLC Trading

Susan,
I would appreciate your assistance in determining how the book needs to be 
organized.  In what legal entity it needs to be.  The P&L for management 
purposes will roll up to Financial Trading in Global Markets.
Thanks. Sheila

---------------------- Forwarded by Sheila Glover/HOU/ECT on 17/08/2000 03:17 
---------------------------
From: John Viverito@ENRON on 17/08/2000 03:16
To: Darren Delage/HOU/ECT@ECT
cc: Gary Hickerson/HOU/ECT@ECT, Jan-Erland Bekeng/AP/Enron@Enron@ECT, Sheila 
Glover/HOU/ECT@ECT, Susan Musch/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 
Subject: Re: Enron Japan Trading and Enron Global Markets LLC Trading  

 Darren-

 Pursuant to your questions relating to interest rate and foreign exchange 
trading in Japan, please review the advice below:

 Interest Rates and Foreign Exchange Transactions.  

 Transactions with respect to interest rates and foreign exchange (other than 
financial futures transactions) are generally not subject to specific 
regulation in Japan.  Banks, securities companies are permitted to enter into 
transactions of this type as part of their ancillary business, but are not 
granted an exclusive mandate to conduct these transactions.  

 Accordingly, it would be possible for Enron Japan Corp. to conduct interest 
rate and foreign exchange transactions with ordinary Japanese corporations as 
well as financial institutions.  

 However, in the event that Enron Japan does conduct interest rate or foreign 
exchange transactions with a  corporation that is not a financial 
institution, the risk that the transaction may be considered to be gambling 
increases.  The fact that one of the parties to a derivative transaction is 
authorized by statute to enter into the transaction will constitute a defense 
to an allegation that the transaction constitutes gambling.  If neither party 
to the transaction has the benefit of a specific authorization, it will be 
necessary to rebut an allegation of gambling by arguing that the parties had 
a legitimate business reason for entering into the transaction.  Baker & 
McKenzie has stated that this risk is relatively low and are not aware of any 
cases where such activity has been problematic.

 In addition, where the transaction constitutes an OTC financial futures 
transaction (for example, a swap where the price is based on an interest rate 
index quoted on a financial futures exchange in Japan), the transaction will 
be regulated under the Financial Futures Trading Law (see below).

 Financial Futures Transactions.  

 In summary, under the Financial Futures Trading Law, if Enron Japan wishes 
to conduct financial futures brokerage business it must hold a license.  If 
Enron Japan does not hold such a license, the counterparties with whom it may 
conduct financial futures transactions will be limited to banks, securities 
companies and members of a Financial Futures Exchange who are licensed as 
financial futures brokers.  Financial futures transactions include the 
following:

  (a) futures contracts in relation to currencies, etc. and listed options 
with respect to currencies, etc.; and

  (b) OTC financial futures transactions.

 With regard to the question as to whether the trades that you engage in have 
to be booked under Enron Japan Corp., or whether you can execute for Enron 
Global Markets LLC, this is really a tax question for Susan Musch, who I have 
copied on this e-mail.  My general understanding is that, so as not to 
develop a permanent establishment for tax purposes, which could create tax 
liabilities for an offshore entity conducting such activities, the trades 
should be booked with Enron Japan Corp. This is subject to Susan's advice, 
which will provide you further details and perhaps more sophisticated methods 
to approach this issue.

 Looking forward to seeing you back in Japan.

 Best regards,

 John



	Darren Delage@ECT
	08/16/2000 12:13 PM
		 
		 To: John Viverito/Corp/Enron@Enron, Sheila Glover, Jan-Erland 
Bekeng/AP/Enron@Enron
		 cc: Gary Hickerson/HOU/ECT@ECT
		 Subject: Enron Japan Trading and Enron Global Markets LLC Trading

Hello John, 

As you know, I am looking at returning to Tokyo on temporary assignment  
effective September 1 to support our efforts in Enron Japan as well as to 
leverage the locational advantage for Financial trading (part of Enron Global 
Markets LLC) From what I understood of our earlier conversations, there is 
not a legal issue with entering into foreign exchange or fixed income trades 
with another counterparty located in Tokyo, whether it be another US bank or 
a Japanese bank.  Can you please generally confirm this?  Do the trades that 
I engage in have to be booked under Enron Japan/ or can I execute for Enron 
Global Markets LLC? 

Sheila,
If the trades that I do in Japan have to be booked under Enron Japan, how 
does the accounting work to effectively transfer P&l back to Gary's RC? (ie 
how are we accounting for proprietary trading p&l in London office?) and are 
there any nuances that I need to be aware of in the booking/implementation of 
these trades

Jan,
 what information are you going to need from Sheila's group in order to be 
comfortable with the transaction and accounting process? {either on 
proprietary and/or on order flow originating either in Japan or abroad- ie an 
Australian interest rate hedge that I conduct out of Japan


Sincerely,
Darren