CFTC grants seven-day extension request
The Commodity Futures Trading Commission is expected to vote June 21 on the first of two petitions to trade futures contracts based on motion picture box office returns.The CFTC had been slated to decide Monday whether to grant Media Derivatives a license for its film futures trading venture, but instead it granted the firm a one-week extension on its petition. It said Media Derivatives had requested the delay so it could review the futures and options product submissions to the agency by its Trend Exchange unit. It is referring to the two types of contracts proposed by Media Derivatives that would be based on domestic B.O. revenues for individual films rated by the MPAA. Media Derivatives declined comment on Monday. Media Derivatives and the Cantor Exchange, a second proposed B.O. futures trading venture, had been enjoying a routine ride through the CFTC regulatory process with final approval expected this month. But sudden opposition from the MPAA and a coalition of Hollywood interests has made approval anything but a slam dunk (Daily Variety, June 2). At the request of the coalition, the agency held a public hearing last month to hear insights from its staff as well as experts on both sides of the suddenly controversial B.O. futures issue. Bob Pisano, MPAA’s interim CEO, was among the detractors voicing fears that the proposed exchanges amounted to gambling vehicles that would do great harm to the industry. Trend Exchange CEO Robert Swagger and Cantor Exchange topper Richard Jaycobs repeated their assertions that the MPAA’s campaign to derail the proceedings is based on unfounded fears. Meanwhile, House-Senate conference committee began work this week on financial reform legislation, urged on by the White House. The Senate measure contains a provision that would bar any trading of futures based on motion picture box office revenues. The conferees had earlier set July 4 as a deadline for their efforts to reconcile the two bills, but the White House wants them to reach agreement before President Obama heads for an economic meeting in Toronto this month. The MPAA said it was appreciative of the CFTC’s extension on the decision regarding Media Derivatives. “We believe both the proposal by Media Derivatives, Inc, and a separate proposal by the Cantor Futures Exchange L.P., which is also still pending before the CFTC serve no public interest and, to the contrary, can significantly harm the motion picture industry and impose new, substantial costs that do not exist today,” said Greg Frazier, MPAA exec veep, in a statement Monday. “These are proposals that ought to be under the jurisdiction of the federal gambling and gaming laws, not the federal commodity trading laws.”
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