Raymond,

Thank you for your note.  It would be great if you could be ready to roll-out 
Korean Weather in the near future.   It would be tough to sell Weather 
Derivatives in Korea, but the early move can be positive for us especially 
because K-Weather, a local weather forecasting company, is also studying 
Weather Derivatives for potential launch.  Regarding the questions you asked, 
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 
Hunt/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joseph P Hirl/AP/ENRON@ENRON, David 
Forster/Corp/Enron@Enron, John Ambler/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, 
Mike Dahlke/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bruce 
Lundstrom/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Alan 
Aronowitz/HOU/ECT@ECT@ENRON, Mike Brown/ENRON@Gateway@ENRON, Justin 
Timothy/ENRON_DEVELOPMENT, Paul Quilkey/ENRON_DEVELOPMENT, John 
Viverito/Corp/Enron@Enron, Rousseau Anai/AP/Enron@Enron, John 
Chismar/SIN/ECT@ECT@ENRON, Victor Santos/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, 
Li Yin Lim/SIN/ECT@ECT@ENRON, Mark Taylor/HOU/ECT@ECT@ENRON, David 
Minns/ENRON_DEVELOPMENT, Jonathan Whitehead/AP/Enron@Enron, Michelle 
Lee/Corp/Enron@Enron, Ann Brown/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Matthias 
Lee/SIN/ECT@ECT@ENRON, Angeline Poon/SIN/ECT@ECT@ENRON, Paul 
Smith/ENRON_DEVELOPMENT, Christian Werner/ENRON_DEVELOPMENT, Allan 
Ford/ENRON_DEVELOPMENT 

Subject: Comments & questions re: EOL Korea  

To Jae- Moo, 
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, 
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 

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

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

(b) How necessary are the meetings with ( pg 5 of presentation)
".. Bank of Korea (BOK)/ Ministry of Finance & Economy (MOFE) for 
classification of weather derivatives as commodity derivatives.." ?
Is this meeting to meet
"...except for Foreign Exchange Transaction Regulations (FETR) in case of 
foreign currency trades
? Classification of weather derivatives as commodity or financial derivatives 
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 
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 
regulates OTC derivative transactions, and FETR is applicable only when FX is 
involved in a transaction or when a transaction is between a Korean resident 
and a non-resident.  Thus, as far as we understand based on the Kim & Chang 
report and conversations with FSC and other local lawyers, if a transaction 
(Weather derivative or other commodity derivative) is between residents in 
Korea (e.g., a Korean customer and Enron Korea) in Korean currency (Won), 
neither FETR nor any other regulations are applicable.  No report or approval 
would be required.   

(c) 
pg 18 of presentation 
'...All other EnronOnline products with the exception of bandwidth and 
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 
derivative products in Korea since Korea has no experience in such products 
or concepts.  Please refer to my previous e-mail to Matt for definitions of 
derivative transactions (commodity and financial).

"...Commodity derivatives require a prior reporting to the Bank of Korea for 
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 
for a transaction with FX involved or between a resident and non-resident in 
Korea.  


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

We will provide relevant information for Christian.

We will be able to assist with (if reqd, see points 4b & c above)  Thanks. It 
would be necessary only when we decide to deal with FETR.
"...  For weather derivatives, arrange presentation meetings with BOK/MOFE 
for classification of weather derivatives as commodity derivatives
_ May require longer time for their decision making  
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 
Hirl/AP/ENRON@ENRON, David Forster/Corp/Enron@Enron, John 
Ambler/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRON, Mike 
Dahlke/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRON, Bruce 
Lundstrom/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRON, Alan 
Aronowitz/HOU/ECT@ECT, Mike Brown/ENRON@Gateway@ENRON, Justin 
Timothy/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRON, Paul 
Quilkey/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRON, Raymond 
Yeow/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRON, John 
Viverito/Corp/Enron@Enron, Rousseau Anai/AP/Enron@Enron, John 
Chismar/SIN/ECT@ECT, Victor Santos/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRON, 
Li Yin Lim/SIN/ECT@ECT, Mark Taylor/HOU/ECT@ECT, David 
Minns/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRON, Jonathan 
Whitehead/AP/Enron@Enron, Michelle Lee/Corp/Enron@Enron, Ann 
Brown/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT@ENRON, Matthias Lee/SIN/ECT@ECT, 
Angeline Poon/SIN/ECT@ECT 

Subject: Re: EOL Korea  

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 
Commodity Derivatives are acceptable to the Bank of Korea, although your and 
Korean external lawyer's (Kim & Chang) informal verbal enquiries with the 
Bank of Korea have suggested they have accepted some  7 or 8 reports since 
April last year (all from Hyundai Oil).

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

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

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

Regards
Matt





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

Subject: EOL Korea

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

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

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

Best regards,

Jae-Moo