The language that puzzles me is on page 24 of the New Regulatory Framework
release.  It is discussing the Chicago Board of Trade's suggestion that the
exclusion for unilateral transaction execution facilities, such as
EnronOnline, be deleted.  The release says:

"However, under the proposed exclusion there can be but one counterparty to
all market participants.  That is quite different from using one or more
specialists in a multilateral trading setting.  In that structure, the bids
and offers of non-specialists are permitted to interact with each other."

I can understand the point with respect to "or more" specialists, but I
don't understand how you can distinguish EnronOnline from a market with a
single specialist who is a counterparty to all trades.  I also don't
understand the point about bids and offers interacting with each other.
This may be because I don't understand how specialists go about their
business.  But the question is, I suppose, does EnronOnline have to take
steps to make sure that bids and offers are isolated from one another so
they don't "interact?"  Maybe, in fact, that's the way EnronOnline works,
but this is pretty confusing to me.  I suppose this language may cause more
trouble for DealBench than EnronOnline, since DealBench deal rooms may have
all sorts of interactions among bidders.

I'd appreciate your thoughts.

Robert S. Baird
Vinson & Elkins L.L.P.
One American Center
600 Congress
Austin, Texas 78701
Telephone: (512)495-8451
When calling from Houston (713)758-2414
Fax: (512)236-3210
Email: rbaird@velaw.com
Home telephone (512)347-8066
Car phone: (512)627-8065
Home fax: (512)347-8065
Pager: 1-888-487-2651

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