In the past few months, the procedures for setting up new curves and books 
have not been followed by everyone. 

The following memo documents the procedures to 1) set up a new curve, 2) set 
up a new book, and 3) change a portfolio hierarchy.  Please note that risk 
management (for each commodity group), "risk management"  is responsible for 
ensuring that information is flowing appropriately between the valuation 
systems and RisktRAC (Risk Analysis and Reporting can help, but do not have 
all of the ERMS information to be able to ensure the completeness of 
RisktRAC).

I have attached the request form for each of these changes at the bottom of 
this memo.  Please ensure that everyone in your group obtains a copy. 

The procedure to set up a new curve is as follows:

Trader starts trading at a new location or a new commodity and needs a new 
curve set up
Trader communicates this to risk management
Risk management constructs new curve in ERMS (with the help of the IT 
department)
Risk management completes a curve set up request form to set up curve in 
RisktRAC
Curve form is forwarded to Risk Analysis and Reporting
Risk Analysis and Reporting sets up curve in RisktRAC
A system generated message is sent to people on the "curve list" indicating a 
change in the RisktRAC curves has been made

If the curve is not set up in RisktRAC the positions are not captured in the 
VAR or engine, thereby making VAR inaccurate.  As a side note, Risk Analysis 
and Reporting has implemented a new process in which on a weekly basis new 
curves set up in ERMS are reviewed to ensure that these have been set up in 
RisktRAC.  We did this for the first time today and noted numerous curves in 
ERMS that are not in RisktRAC - which we are working with you to resolve.

The procedure to set up a new book in RisktRAC is as follows:

Trader/risk management determines new book is needed
New book request form (for RisktRAC) is completed by risk management
New book request form is forwarded to Risk Analysis and Reporting
Risk Analysis and Reporting sets up book in RisktRAC
Risk Analysis and Reporting forwards request to ERMS administrator and global 
counterparty group to request that book is set up in valuation and 
counterparty systems
Once all groups have completed their individual set ups, a final e-mail is 
sent to personnel on the "books list" and the book administrator in the risk 
management department who requested the book

It is important that there is a one to one link between the ERMS and RisktRAC 
books, or not all positions will be captured in RisktRAC (two commodities per 
ERMS book does not flow properly into RisktRAC).

The above two processes have formally existed for a number of months.  
Additionally, we are formalizing the procedure for changing portfolio 
hierarchies.  The procedure now is:

Risk management is responsible for requesting all portfolio hierarchy 
changes.  Previously, changes could be made through a request by Risk 
Analysis and Reporting or RAC.  These two groups are no longer allowed to 
submit change requests.  All requests must come through risk management.
Risk management completes a request, including the reason for the requested 
change in structure
Risk management forwards the request to Risk Analysis and Reporting
Risk Analysis and Reporting makes the change and notifies risk management 
that the change has been made.

If you have any questions, comments or concerns, please call: me X39123, 
Chris Abel X33012, Burton McIntyre X57197, or Susan Trevino X31462.

Thanks,

Shona