Futures Industry News
Financial reform bill sinks box-office futures
Jun 29, 2010 12:30 PM
Despite the Commodity Futures Trading Commission's approval of not one but two separate box office futures proposals, it appears unlikely that traders will see such a market any time soon. The financial reform bill awaiting final approval by the House and Senate will ban any contracts based on box office receipts.
Cantor Fitzgerald, one of the two firms applying to write and trade the contracts, decided to abandon its plans as the bill nears a vote, despite the CTFC's 3-2 vote in its favor on Monday.
Media Derivatives, the other company to receive approval, said last week that it would try to launch its exchange despite the impending ban, claiming it would be "grandfathered" in because it was approved weeks before the bill is scheduled to pass.
Opponents of box office receipts futures say it is little more than gambling on and manipulation of the film industry, while supporters say it will help filmmakers and producers hedge the risk of making movies. The MPAA strenuously opposed the concept and deployed a massive public relations and lobbying campaign to push Congress into regulating the proposed exchanges out of existence.
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