Is the futures industry going Hollywood? That’s the question as the battle over approval of futures contracts based on box office receipts continues. The Commodity Futures Trading Commission (CFTC) is apparently giving serious consideration to the contracts, though, as they announced today that there will be an open meeting on May 19 to consider them. But you have to wonder: are traders in general actually taking this seriously?
Cantor Futures Exchange and Media Derivatives Inc. (MDEX) received CFTC approval as designated contract markets last month but the CFTC has yet to approve the exchanges’ proposed movie futures contracts. The exchanges face opposition on the contracts from the Motion Picture Association of America, which says they could damage the movie industry, as well as the Senate, which seeks to ban movie futures trading in its latest reform bill. But MDEX CEO Robert Swagger says, “It’s hypocritical for lawmakers to say ‘we want open regulated exchanges’ and then… exempt the movie industry.’”
Regardless of how the battle turns out, the attitude among some in the futures industry is, “who cares?” One analyst told me that the whole concept of movie futures is a “waste of the regulatory body’s time” and ”it’s hard to take this seriously.” So unless some major celebrities stroll into the CFTC meeting next week, it looks like some aren’t very starstruck by this whole idea.