1 / 13

Trading, Risk Management and Back-office Overview

DRAFT COPY. Trading, Risk Management and Back-office Overview. July 2000. Table of Contents. 1. Overview 2. Trading Organization 3. IT Applications. 1. Overview. Services: Enron North America Corp. (“ENA”) will design and populate NewCo’s trading organization with key personnel

javen
Download Presentation

Trading, Risk Management and Back-office Overview

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. DRAFT COPY Trading, Risk Management and Back-office Overview July 2000

  2. Table of Contents 1. Overview 2. Trading Organization 3. IT Applications

  3. 1. Overview

  4. Services: Enron North America Corp. (“ENA”) will design and populate NewCo’s trading organization with key personnel ENA, for a fee, will enter into a services agreement with NewCo for IT applications including back-office and risk management services and other IT services Strengths: ENA is the largest power marketer in the country, trading over 400,000,000 MWh in 1999 Forbes A-List of Companies: “Top Power Company in the World” Forbes Global Business Magazine, January 11, 1999 ENA’s trading and marketing expertise extends into natural gas, power, coal, liquids, emissions credits, pulp and paper and other energy intensive products Summary Overview

  5. 2. Trading Organization

  6. Risk Management & Trading Trading Organization • Trading and risk management infrastructure to replicate the Enron model • ENA to contribute key trading and marketing personnel • NewCo’s trading will utilize ENA’s back office systems and risk management capabilities (services agreement) • Risk management and trading to focus on asset optimization and spread option value, not speculative trading

  7. Trading Organization Trading and Marketing Org. Chart

  8. Trading Resources Trading Organization • Trading Personnel: • ENA would nominate NewCo’s Head Trader • The Head Trader would fill additional spots with a combination of FPLE, ENA and if needed, outside employees • Required Skills: • Knowledge of forward energy markets and derivatives • Experience with the physical power grids and gas pipelines • Ability to manage the plant’s spread option value and asset optimization

  9. 3. IT Applications

  10. Services Agreement IT Applications • ENA proposes to provide the following contracted IT services to NewCo for a 24 month period (with evergreen option) • Back-office and risk management applications utilizing ENA’s proprietary systems for deal confirmation, risk management, invoicing/collections/payment and global contract/global counter-party management • EMS/Real Time Monitoring applications for NewCo’s facilities • Additional applications for IT infrastructure needs • During the term of the services agreement, NewCo would explore all of its options regarding: • maintaining existing contractual arrangement with ENA; or • replacing with own proprietary systems

  11. CONFIDENTIAL IT Applications System Diagram Deal Confirmation Trade Information EnPower System Electronic Trade Blotter Customer NewCo Trading Trade Trade Information Trade Information Invoicing/ Collections/ Payments Risk Management (Valuation/Daily P&L) Portfolio Data Unify System Customer Data Global Contracts Global Counter-party

  12. Deal Confirmation Prepares customer confirmations, customer contracts, performs broker check-outs and reviews deal integrity EnPower System allows for automated confirmation preparation and auto-faxing to expedite customer service Nightly check-out and reconciliation of all deals executed Risk Management Calculates daily profit & loss of portfolio Reconciles new deals and portfolio changes Independent verification of commodity, volatility curves Fully automated, EnPower System System provides flexible reporting tools Back-office Services IT Applications Invoicing/Collections/Payments • Daily check-out with counter-parties • Fully automated Unify System • Reconciliation of invoicing/payment to general ledger system • Automated aging of accounts • Cash management • Accounting applications provided via SAP Global Contracts/Counter-party • Manages contract and customer information • Automated feed for downstream processing • Allows for counter-party data management and customization Experienced in over 375,000 deals

  13. Additional IT Services IT Applications • ENA can also provide the following services: • The use of ENA’s network, servers and desktop software including Microsoft Office and Exchange applications • Initial deployment and support for desktop PC’s and printers • Unix, DBA, NT and Help Desk support for ENA’s applications and infrastructure • The use of ENA’s Lucent and Trading IPC phone networks • Internet access for NewCo’s employees • Interfaces between NewCo’s and ENA’s applications • ENA’s Standard Market Data feeds for NewCo’s traders • Custom software enhancements

More Related