Federal regulators have delayed by a week a decision on whether to greenlight a proposed new exchange to trade in film futures tied to weekend box office receipts.
A spokesman for the Commodity Futures Trading Commission said that Media Derivatives Inc., which is seeking to start the Trend Exchange, agreed to the extension until April 16 until the commission could gather more information from “a third party.”
The spokesman declined to name the third party, but studios, exhibitors and some Hollywood unions have vigorously opposed the idea, arguing that such exchange could harm the business as it would subject a movie’s pre-release publicity to the whims of traders, who may have scant information about the viability of a title. Moreover, they argue that it would be next to impossible to police price manipulation and unlawful insider trading.
Lawmakers such as Sen. Dianne Feinstein (D-Calif.) and Sen. Barbara Boxer (D-Calif.) wrote letters to the commission urging a delay in their decision, arguing that studios and others needed more time to make their case.
By a legally mandated deadline, the CFTC was to have decided last month, but Media Derivatives agreed to a delay until today as the Motion Picture Assn. of America raised objections. The spokesman for the CFTC said that the extension until next Friday would be the final delay.
Robert Swagger, CEO of the Trend Exchange, said they agreed to the extension at the request of the commission’s chairman and after individual meetings with commissioners.