Washington
– The Senate Agriculture Committee on Wednesday approved a bill that would
prohibit trading in motion picture box office futures, potentially derailing
such ventures in the works from Cantor Exchange and Trend Exchange, Variety
reported. The provision banning box office futures trading was reportedly
included in the Wall Street Transparency and Accountability Act "following
heavy lobbying in recent weeks by the Motion Picture Assn. of America and other
industry groups."
While federal regulators have already approved the
formation of the Cantor and Trend exchanges, it’s unclear whether the Commodity
Futures Trading Commission will approve the actual trading of box office
futures.
"We believe these plans are based on a faulty understanding of
the film business and could cause real financial harm to both the film industry
and other Americans drawn in by an online gaming platform that could be easily
manipulated," MPAA interim CEO Bob Pisano told Variety.
Related Links:
http://www.variety.com/article/VR1118018130.html
http://snipurl.com/vp9u9
(DMW previous coverage)
The comment by one representative yesterday who said “policing of the new markets would draw resources away from agricultural commodities markets” shows exactly why Congress should stay out of this debate and leave it to the CFTC to review the merits of these products.
I guess according to this representative, we shouldn’t introduce ANY new exchange-traded products, since they would detract CFTC oversight from the 6% PERCENT in overall exchange-traded volume that agricultural products make up!
Lincoln’s “added language” to the bill outlawing movie box office futures is only a result of heavy lobbying by the MPAA, and a result of Lincoln and the other senators who approved this language catering to the special interests that are filling their political coffers.
Blanche Lincoln’s sister also happens to be a Hollywood director. Conflict of interest, anyone?
There is already a federal regulatory agency, the CFTC, which is more than capable of evaluating the merits of these proposed products, and according to the federal regulatory statutes has until late June to rule on them.
The language in this bill not only seeks to circumvent this review process by imposing a legislative ruling on these products, but also sends a CLEAR message that congress has no confidence in the CFTC to perform the regulatory functions that they are entrusted with through the Commodities Exchange Act (CEA).
We should not be advocating a precedence that excludes one industry from benefitting from exchange-traded, centrally-cleared, federally-regulated futures instruments without allowing the agency entrusted to approve or disallow them to conduct their due diligence.