These are (Unedited) notes from the following (lengthy) telephone call:

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James and Bernadette of Goldman just called to ask where we are specifically
on gas (more difficult) and power (way ahead) documentation in Europe. They
think now is the right time for ISDA  to address this issue. Many
counterparts are still only in physical markets. They feel strongly that
there is much groundwork to be done and clearly to be done now. Financial
institutions are not dealing with "trading" arm or mindset, BP, Shell, etc.
European regs will not be completed until 2005.

Although there's momentum for changing the documentation now, the
traditional players (many of whom are NOT ISDA members) are "locked into"
terms.  James/Bernadette's idea is to meet now with Katia/John/Richard T and
Rita of RWE and start talking now.  They emphasize starting from the energy
markets, not the financial markets so the market players are NOT turned off.
The market players extrapolate from their physical days - (according to GS,
many may get a carve out from FSA for capital requirements so there is no
real need for netting agreements).  Further there is skepticism about the
terms of dealing in financial markets (and physical terms are where trading
often takes place).

James points put the GTMA is less netting than in the iSDA and there is a
large and troubling acceptance issue for ISDA-style documentation.
Bernadette points out certain provisions are too burdensome, such as the
Confidentiality Provisions. Bernadette mentions EFA's questionnaire.

Both James/Bernadette are hopeful that the fix is in the bridge.  The energy
companies want a physical contract (e.g. GMTA) but will do financials under
ISDA   They say fixing the bridge is the first step toward a
one-size-fits-all ISDA-type master and some are already amenable.  This
avoids fighting every battle in every market. They see a 3-4 year period
perhaps before there's buy-in on the importance of netting.  Also very
significant: Bernadette suggests that ISDA spend  time with key players in
physical markets (BP), whether or not they are members and educate.
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Katia, could you call James (7774-0022) or Bernadette (7774-1691) re this
and offer several time slots.
They believe Rita's involvement is critical as well and of course the
appropriate lawyers representing ISDA.


Mark and Stacy, we should add include this topic to the NA Energy call we
are planning.
Regards, Ruth