Coalition includes DGA, IFTA and Theater Owners
A week after expressing its opposition against the launch of two new movie futures exchanges, the Motion Picture Assn. of America has assembled a coalition of entertainment industry representatives to urge the Commodity Futures Trading Commission to delay its approval of the ventures.
Those pairing up with the MPAA include the DGA, IATSE, the Independent Film and Television Alliance and the National Assn. of Theater Owners.
The CFTC is currently skedded to start considering approval of an application by Media Derivatives Inc. (MDEX) to launch the Trend Exchange as a market to trade contracts for film futures on April 2, so that it can launch by April 23. A separate market from Cantor Futures Exchange is expected to be approved around April 20.
In a letter to the CFTC, the MPAA requested the CFTC not start the approval process until April 16, so that the industry orgs can submit a written comment addressing the merits of Media Derivatives’ application. They said an extension wouldn’t prejudice MDEX because of the April 23 deadline.
The orgs said they needed the time to gather information and provide a focused arguments that will help the CFTC in whether to approve Media Derivative’s launch. Those include outlining how there’s no existing market in box office receipts, concerns with how contracts will be priced, the potential for manipulation and insider trading issues, as well as other points on how the trading “could harm the motion picture industry.”
They said the extra time was needed since they had just received Media Derivatives’ rulebook supporting its application, which hadn’t previously been available to the public. It also said it had received a letter to the CFTC stating that distributors would have to provide the exchange with “evidence to support its public box office number when it falls outside the standard deviation level.”
“We were unaware of any proposed requirement that studios disclose information to MDEX,” the letter said, questioning “whether any authority exists to require disclosure of any information from studios.” The orgs will separately address the Cantor Exchange.