Re: Comments & questions re: EOL Korea ,
 Raymond,

Thank you for your note.  It would be great if you could be ready to roll-o=
ut=20
Korean Weather in the near future.   It would be tough to sell Weather=20
Derivatives in Korea, but the early move can be positive for us especially=
=20
because K-Weather, a local weather forecasting company, is also studying=20
Weather Derivatives for potential launch.  Regarding the questions you aske=
d,=20
please find below my answers in blue.  Thanks.

Regards,
Jae-Moo





Raymond Yeow@ENRON_DEVELOPMENT
08/25/2000 04:58 PM
To: Matthias Lee/SIN/ECT@ECT@ENRON
cc: Jae-Moo Lee/Corp/Enron@ENRON, Christopher B=20
Hunt/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joseph P Hirl/AP/ENRON@ENRON, Dav=
id=20
Forster/Corp/Enron@Enron, John Ambler/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT,=
=20
Mike Dahlke/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bruce=20
Lundstrom/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Alan=20
Aronowitz/HOU/ECT@ECT@ENRON, Mike Brown/ENRON@Gateway@ENRON, Justin=20
Timothy/ENRON_DEVELOPMENT, Paul Quilkey/ENRON_DEVELOPMENT, John=20
Viverito/Corp/Enron@Enron, Rousseau Anai/AP/Enron@Enron, John=20
Chismar/SIN/ECT@ECT@ENRON, Victor Santos/ENRON_DEVELOPMENT@ENRON_DEVELOPMEN=
T,=20
Li Yin Lim/SIN/ECT@ECT@ENRON, Mark Taylor/HOU/ECT@ECT@ENRON, David=20
Minns/ENRON_DEVELOPMENT, Jonathan Whitehead/AP/Enron@Enron, Michelle=20
Lee/Corp/Enron@Enron, Ann Brown/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Matthi=
as=20
Lee/SIN/ECT@ECT@ENRON, Angeline Poon/SIN/ECT@ECT@ENRON, Paul=20
Smith/ENRON_DEVELOPMENT, Christian Werner/ENRON_DEVELOPMENT, Allan=20
Ford/ENRON_DEVELOPMENT=20

Subject: Comments & questions re: EOL Korea =20

To Jae- Moo,=20
1. Impressive P'point presentation indeed.

2. Friday Sep 1 - 800am TYO time is good for Australia, I will be attending
is there anything that i need to arrange at our end ??

3. After the successful roll-out of W for Japan & Oz thus qtr,=20
as discussed - we are ready to roll-out Korean W say in Mid October ???
Your email & presenatation thus arrived at a very good time.

4. Just some questions -
You may answer in the conference call or by email -- your choice=20

(a) why has W derivatives been singled out by FSC for potential review=20
when there is no regulation of eg LPG , or plastics swaps & fwds  ?  (pg 11=
=20
of presentation)

We are just talking about the theoretical possibility of FSC's (Financial=
=20
Supervisory Commission) review of Weather Derivatives because of the novelt=
y=20
in Korea although, according to the Kim & Chang report, there are currently=
=20
no laws or regulations in Korea that regulate marketing of OTC derivative=
=20
transactions through the internet or otherwise.  When we talked to FSC a=20
couple of months ago, they confirmed that there is no law or regulation=20
restricting Weather Derivatives in Korea.  FSC did not indicate any intenti=
on=20
to review Weather Derivatives for regulation, either.   In addition,=20
according to the Kim & Chang report, Weather Derivatives would not be=20
considered to be an insurance contract subject to Korean insurance=20
regulations.  Kim & Chang also believes that Weather Derivatives should not=
=20
be considered gambling or wagering but a legitimate method of hedging risks=
=20
relating to weather.

(b) How necessary are the meetings with ( pg 5 of presentation)
".. Bank of Korea (BOK)/ Ministry of Finance & Economy (MOFE) for=20
classification of weather derivatives as commodity derivatives.." ?
Is this meeting to meet
"...except for Foreign Exchange Transaction Regulations (FETR) in case of=
=20
foreign currency trades
? Classification of weather derivatives as commodity or financial derivativ=
es=20
under FETR needs to be resolved..."(pg 15 of presentation)

Can we just do it first with Enron Korea as the counterparty ? If so , if=
=20
Korean coy transacts with Enron Korea,
there should be no problem in remitting funds wholly within Korea !
Also we intend to offer product in Won only so no FX involved at all .

According to the Kim & Chang report,   FETR is the only regulation that=20
regulates OTC derivative transactions, and FETR is applicable only when FX =
is=20
involved in a transaction or when a transaction is between a Korean residen=
t=20
and a non-resident.  Thus, as far as we understand based on the Kim & Chang=
=20
report and conversations with FSC and other local lawyers, if a transaction=
=20
(Weather derivative or other commodity derivative) is between residents in=
=20
Korea (e.g., a Korean customer and Enron Korea) in Korean currency (Won),=
=20
neither FETR nor any other regulations are applicable.  No report or approv=
al=20
would be required.  =20

(c)=20
pg 18 of presentation=20
'...All other EnronOnline products with the exception of bandwidth and=20
emission allowances are classified as commodity derivatives in Korea..."
Why is it bandwidth and emission are classified differently?
Will not Weather fall under same category ?

There is no classification or definition of bandwidth, emission or weather=
=20
derivative products in Korea since Korea has no experience in such products=
=20
or concepts.  Please refer to my previous e-mail to Matt for definitions of=
=20
derivative transactions (commodity and financial).

"...Commodity derivatives require a prior reporting to the Bank of Korea fo=
r=20
each trade .."
Is this only relevant if product is not in Won but foreign currency ?

The reporting requirement is relevant under the FETR only which is applied=
=20
for a transaction with FX involved or between a resident and non-resident i=
n=20
Korea. =20


5. pg 28 of presentation=20
Note that Dr Christian Werner - Sydney office will be the person for=20
"Data system =01  For weather derivative products, arrange with a weather=
=20
forecasting company for the weather data feed - timing depends on the=20
location"

We will provide relevant information for Christian.

We will be able to assist with (if reqd, see points 4b & c above)  Thanks. =
It=20
would be necessary only when we decide to deal with FETR.
"...=01  For weather derivatives, arrange presentation meetings with BOK/MO=
FE=20
for classification of weather derivatives as commodity derivatives
_ May require longer time for their decision making =20
Korea Office, Mike Dahlke, EOL Weather specialist (?)"


Best wishes
Raymond






Matthias Lee@ECT
08/24/2000 09:22 PM
To: Jae-Moo Lee/Corp/Enron@ENRON
cc: Christopher B Hunt/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRON, Joseph P=
=20
Hirl/AP/ENRON@ENRON, David Forster/Corp/Enron@Enron, John=20
Ambler/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRON, Mike=20
Dahlke/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRON, Bruce=20
Lundstrom/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRON, Alan=20
Aronowitz/HOU/ECT@ECT, Mike Brown/ENRON@Gateway@ENRON, Justin=20
Timothy/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRON, Paul=20
Quilkey/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRON, Raymond=20
Yeow/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRON, John=20
Viverito/Corp/Enron@Enron, Rousseau Anai/AP/Enron@Enron, John=20
Chismar/SIN/ECT@ECT, Victor Santos/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRO=
N,=20
Li Yin Lim/SIN/ECT@ECT, Mark Taylor/HOU/ECT@ECT, David=20
Minns/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRON, Jonathan=20
Whitehead/AP/Enron@Enron, Michelle Lee/Corp/Enron@Enron, Ann=20
Brown/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRON, Matthias Lee/SIN/ECT@ECT,=
=20
Angeline Poon/SIN/ECT@ECT=20

Subject: Re: EOL Korea =20

Jae-Moo

On the section of Regulatory/Legal Environment, it may be useful to note:

1. There is no official rule or regulation that ex post facto reporting for=
=20
Commodity Derivatives are acceptable to the Bank of Korea, although your an=
d=20
Korean external lawyer's (Kim & Chang) informal verbal enquiries with the=
=20
Bank of Korea have suggested they have accepted some  7 or 8 reports since=
=20
April last year (all from Hyundai Oil).

2. The Bank of Korea take up to two weeks to review the reports and, as Kim=
 &=20
Chang has advised, there remains a possibility that the Bank of Korea may=
=20
reject the report, although they were not able to advise the grounds on whi=
ch=20
a report may be rejected.

3. Although, a foreign counterparty need not file a report or seek approval=
,=20
the Korean counterparty must still do so for the benefit and interest of th=
e=20
foreign counterparty. Kim & Chang advised that where reporting or approval =
is=20
required but is not made or obtained, the Korean counterparty would not be=
=20
able to remit its payments under the transaction. This would clearly impact=
=20
on the settlement of the transaction, in particular shorter term deals sinc=
e=20
reporting and approval may take several weeks.=20

4. The Supreme Court of Korea has ruled that a foreign exchange authorizati=
on=20
that was originally required should be obtained in order for a foreign part=
y=20
to execute any judgment against the Korean party and remit the proceeds.=20

Regards
Matt





Jae-Moo Lee@ENRON
08/24/2000 04:58 PM
To: Christopher B Hunt/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joseph P=20
Hirl/AP/ENRON@ENRON, David Forster/Corp/Enron@Enron, John=20
Ambler/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Mike=20
Dahlke/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bruce=20
Lundstrom/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Alan Aronowitz/HOU/ECT@ECT,=
=20
Mike Brown/ENRON@Gateway, Justin Timothy/ENRON_DEVELOPMENT@ENRON_DEVELOPMEN=
T,=20
Paul Quilkey/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Raymond=20
Yeow/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, John Viverito/Corp/Enron@Enron,=
=20
Rousseau Anai/AP/Enron@Enron, John Chismar/SIN/ECT@ECT, Victor=20
Santos/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Li Yin Lim/SIN/ECT@ECT, Mark=20
Taylor/HOU/ECT@ECT, Matthias Lee/SIN/ECT@ECT, David=20
Minns/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Jonathan Whitehead/AP/Enron@Enro=
n
cc: Michelle Lee/Corp/Enron@Enron, Ann=20
Brown/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT=20

Subject: EOL Korea

As many of you are aware, over the past few months we have been investigati=
ng=20
whether or not it would make sense to seriously consider an EOL launch in=
=20
Korea from a market, regulatory and legal perspective.  The primary interes=
t=20
has been on reviewing whether or not we could launch existing products in=
=20
Korea (e.g., products already handled by Singapore EOL) as well as new=20
products (e.g., Seoul weather).=20

This initial work was directed primarily by the Korea team working within t=
he=20
APACHI group.  If a launch is to progress much further from this point,=20
however, substantial attention by the EOL team would be required.  To=20
facilitate this, the attached presentation summarizes our primary findings =
to=20
date and some of our thoughts.  We would appreciate your taking a look at t=
he=20
attached document.

We would like to arrange a conference call for next Thursday (Aug. 31st) at=
=20
6:00 pm by Houston time (Friday at 8:00 am by Tokyo time) to discuss the=20
attached document and to solicit thoughts as to next steps.  Please let me=
=20
know whether you will be able to join this call or, if you have a conflict,=
=20
an alternative time.  Your participation will be greatly appreciated. =20

Best regards,

Jae-Moo
raymond.yeow@enron.com