CFTC approves exchange, movie futures request next

WASHINGTON (BestGrowthStock) – The Commodity Futures Trading Commission on Tuesday approved an exchange to trade options and futures, but whether it will be allowed to offer movie futures contracts as it has requested is far from certain.

The CFTC approved Cantor Fitzgerald, a broker dealer, to operate a futures exchange. The ruling under the Commodity Exchange Act is the first hurdle the firm needed to begin trading options or futures contracts.

The CFTC said it is still considering whether to allow the firm to offer a contract tied to the box office receipts of a movie, but commissioners so far do not appear convinced the contracts will pass muster.

Last week, the CFTC also approved a new market request by Media Derivatives Inc that could one day be used to trade box office receipts.

“At this point in time, I have not heard any arguments to persuade me that ‘movie futures’ generally can overcome some fundamental design flaws,” CFTC Commissioner Bart Chilton said of Media Derivatives’ application.

There is no timetable for when the CFTC will make a decision on whether either exchange will be allowed to trade movie futures contracts.

Congress is considering legislation that would ban betting on movie box office receipts. A House Agriculture subcommittee also will examine the matter at a hearing on Thursday.

The Motion Picture Association of America contends trading movie futures would damage the reputation and integrity of the industry and make the box office susceptible to potential market manipulation.

A form of betting on the success and failure of box office flicks has been around for more than a decade. In 1996, a website called The Hollywood Stock Exchange was started where participants could invest fake dollars on box office outcomes. A division of Cantor Fitzgerald bought the site in 2001.

Stock Today

(Editing by Lisa Shumaker)

CFTC approves exchange, movie futures request next