Firm Gains Initial Approval For Movie Futures Exchange
April 20, 2010
| 6:29 PM
The Commodity Futures Trading Commission Tuesday approved a second firm's application to be designated as a "contract market," one of the regulatory steps it needs to clear before it can begin its bid to operate a movies futures exchange.
Cantor Futures Exchange is the second organization to gain CFTC approval as a contract market, one of the regulatory steps needed before it can offer an exchange based on speculation over movie box office receipts. The commission gave similar approval on Friday to Media Derivatives, which also is seeking to operate a movie futures exchange. Both firms must still gain approval for any futures they wish to list on their exchanges. "The commission has not approved the trading of any futures or options related to box office receipts at this time," the CFTC said in a news release.
The CFTC is coming under pressure from the movie industry and some lawmakers not to approve the movie futures exchange proposals. The industry argues that such exchanges would be detrimental to the movie industry and are akin to gambling. A financial regulatory bill being marked up in the Senate Agriculture Committee Wednesday would ban movie futures exchanges, while a House Agriculture subcommittee is set to hold a hearing Thursday on the proposed exchanges.
"We believe that the CFTC had ample discretion under the law to reject this proposal by Cantor Futures Exchange L.P. But this is just one in a series of upcoming regulatory steps, and the commission made clear today that Cantor needs CFTC approval before attempting to offer a box-office wagering service," a coalition of movie industry groups including the Motion Picture Association of America said in a statement. "In the upcoming days, we will continue to urge the CFTC to finally reject both the Cantor proposal and a separate proposal by Media Derivatives, Inc."
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