But commission's greenlight could be overruled by Congress
It wasn’t much cause for celebration by the recipient, but the Commodity Futures Trading Commission Monday approved a proposal from the Cantor Exchange for a license to trade box office futures.
The action came three days after a House-Senate conference committee approved a ban on such trading as part of a major overhaul of financial regulations after heavy lobbying by the MPAA and other showbiz groups. (Daily Variety, June 28).
If signed into law, which could happen by July 4, the commission’s actions on Cantor Exchange and its previous approval of a similar plan by Media Derivatives would be rendered moot.
As it did two weeks ago with the Media Derivatives proposal, the CFTC ruled 3-2 in favor of Cantor’s bid with specific modifications to guard against manipulation.
Commissioners Jill Sommers and Bart Chilton again issued brief dissents echoing their previous positions on the Media Derivatives proceeding.
The CFTC vote was accompanied by a brief statement explaining how approval of the Cantor Exchange’s futures contract could be applied to the upcoming film “The Expendables,” distribbed by Lionsgate.
It mentioned in a footnote that Cantor’s ability to offer the contracts would be impacted by Congress. But it said that since the conference report is not law, it could not be considered by the commission.
Cantor Exchange president Richard Jaycobs said in light of the bill reported out by the conferees on Friday, “Cantor is continuing to assess its options for providing risk management and financing tools to the motion picture industry.”
Jaycobs said the exchange was grateful to the “hundreds of motion picture professionals who advocated for box office futures contracts, including all those who publicly voiced their support and those who wrote letters of support to the CFTC and Members of Congress.”
He said the agency’s approval of Cantor’s domestic box office receipts contract “demonstrates that a broad range of participants in the film industry would benefit from the utility and value of those contracts.”
There was no immediate comment from the MPAA on Monday’s CFTC decision.