Re: Report by the President's Working Group on Financial markets
 on Over-the-Counter Derivatives Markets and the Commodity
 Exchange Act


                    Attached is a memorandum from Sullivan & Cromwell
concerning the above subject.  A summary is also included at the end
of the text of this e-mail message.

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Hard copies can be obtained from Ivy Moreno at S&C in New York,
telephone 212-558-3448, e-mail: Morenoi@sullcrom.com.


SUMMARY

                    In order to resolve legal uncertainties regarding the 
status of
over-the-counter ("OTC") derivatives under the Commodity Exchange Act (the 
"CEA"),
Congress requested the President's Working Group on Financial Markets ("PWG") 
to
report on, and make recommendations for legislative and regulatory changes 
with
respect to, such instruments.  On November 9, 1999, the PWG issued its 
report, entitled
Over-the-Counter Derivatives Markets and the Commodity Exchange Act (the 
"Report"),
which proposes a number of substantial changes to the CEA and the regulatory 
structure
for a variety of OTC derivatives.  Subject to the enactment of the 
recommended amendments
to the CEA and regulations of the CFTC, the Report could substantially 
alleviate the legal
uncertainty that currently exists with respect to OTC derivatives, thereby 
facilitating
further growth and development in the markets for such instruments.

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 - CMS10233.pdf