Mark as you may recall we are investigating ways to  broaden the safe harbour 
exemption  Enron Australia Finance Pty Ltd (EAF) has under Australian 
securities legislation to derivatives. Currently the exemption just covers 
electricity related products. Our objective is to be granted an exemption 
that will cover all products EAF would trade through EOL. The catalyst for 
this change is to prepare ourselves for legislative changes due next year 
that will require a license or an exemption to trade derivatives. 

Under existing policy the Australian regulator (ASIC) requires the receipt 
of  an exemption to be subject to the prudential oversight. Alternatively the 
receipent could be guaranteed by an entity subject to such oversight. Certain 
overseas regimes are specifically identified as being satisfactory, including 
that applying to   a futures commission merchants  registered under the 
Commodity Exchange Act.

Recent investigations have indicated that a company we acquired through MG 
now known as  Enron Trade Services, Inc. (ETSI) is licensed by the CFTC.  I 
understand this company is incorporated in Delaware.  I spoke to Justin when 
I was in London and we could not identify any impediment to such a guarantee 
arrangement.  

As the next step I was proposing to ask Sullivan & Cromwell for advice to 
confirm
the exact licence that ETSI has under the Commodity Exchange Act
that there are no US regulatory  obstacles to such an arrangement.  

Would you confirm this approach would be acceptable to you. Assuming it is 
would you suggest the appropriate contact at Sullivan and Cromwell who would 
be qualified to advise on this matter.