Movie Futures Facing Congressional Vote

Federal regulators have approved two proposals to create exchanges for movie box office futures, but financial regulation legislation that’s nearly made its way through congress could put an end to things before either exchange ever opens.

The Commodity Futures Trading Commission approved contracts for the Cantor Fitzgerald-backed Cantor Futures Exchange June 28 after greenlighting similar contracts for the Veriana Ventures-backed Trend Exchange weeks earlier.

In its decision, the CFTC found that box-office receipts fit within the legal definition of a commodity and aren’t “readily susceptible” to manipulation.

Still, House-Senate conference committee decided otherwise, inserting language into the financial reform package that would outlaw box-office futures trading.

Legislators may have gotten a push from major movie studios that opposed the ban on the basis that movie futures trading could lead to sabotage in the industry.

Cantor Fitzgerald CEO Richard Jaycobs told the Los Angeles Times he respected “the MPAA’s ability to be effective on [Capitol] Hill” and said his company had abandoned its plans.

“The broader opportunity of motion picture finance is still something we have to evaluate, but we know now we’re not going to do futures contracts,” he said. “The bill is quite clear.”

Trend Exchange has reportedly considered taking legal action to block the ban.

The House of Representatives voted to pass the finance reform package June 30. It heads to the Senate next and a vote is expected in mid-July.