CFTC OKs more boxoffice trading
Cantor passes review; MPAA fights proposalsHollywood studios vow to continue to fight proposals to create boxoffice-based commodity trading after a second proposed exchange won preliminary approval from federal regulators Tuesday.
The Commodity Futures Trading Commission said that the proposed Cantor Exchange has passed muster in a review of its online technology; the commission approved similar technical details of the proposed Trend Exchange on Friday. But the CFTC also must rule on product details of the exchanges, which the major film studios stridently oppose.
Those rulings are expected during the next few weeks or even days. Fearing the worst, the MPAA and other industry groups have launched a second battle front in Congress and in addition to lobbying the CFTC have been pitching a fit with politicians.
A Hollywood-backed amendment recently was added to the Wall Street Transparency and Accountability Act, a financial-reform Senate bill, to prohibit boxoffice commodity exchanges. The amendment is set for discussion todayWEDNESDAY by the Senate Agriculture Committee.
On Thursday, a House subcommittee on farm commodities that oversees the CFTC also will review the exchange proposals. Those set to testify before the panel include Cantor Exchange president Richard Jaycobs, MPAA interim chief Bob Pisano, entertainment attorney Schuyler Moore and Robert Swagger, CEO of Trend Exchange operator Media Derivatives.
"We appreciate the excellent work of the CFTC and look forward to continuing to work with them," Jaycobs said after winning the technical approval.
The MPAA underscored its resolve to fight the exchange proposals.
"Our coalition of film industry workers, creators, independent producers and distributors, business organizations and theater owners remains united in our opposition to a risky online-wagering service that would be detrimental to the motion picture industry and the 2.4 million Americans whose livelihoods are based on this industry," MPAA spokesman Howard Gantman said. "We believe that the CFTC had ample discretion under the law to reject this proposal."
Cantor Exchange and Trend Exchange had planned to begin trading by this week, but their launches have been delayed pending final regulatory review.
Cantor would allow direct access to its online exchange, whose users would buy contracts taking long or short positions on boxoffice projections from six months before films' wide release through the first four weeks they play in theaters. Trend Exchange would use brokered trades and halt trading once movies hit the big screen.