A coalition led by the Motion Picture Association Of America (MPAA) has urged Congress to block a futures market that will allow large and institutional investors to bet on box office results.
The call came after the Commodity Futures Trade Commission (CFTC) voted three-to-two yesterday [14] to allow Trend Exchange to offer contracts and options on its MDEX futures exchange.
The coalition, which includes the National Association Of Theatre Owners, the DGA and the Independent Film And Television Alliance, wants a permanent ban on the MDEX contract and a separate proposal aimed at smaller investors from Cantor Futures Exchange that is pending before the CFTC.
The Senate has approved a ban on trading derivatives based on box office as part of a larger finance reform bill known as The Wall Street Transparency Act, which would prohibit such futures trading. A House-Senate conference committee is reviewing the bill.
“These proposed contracts fail to demonstrate that they serve the public purpose futures contracts should serve, they are highly susceptible to potential manipulation, and pose real possible economic damage to an industry that employs over 2.4million men and women working in virtually every state in the country,” MPAA president and interim CEO Bob Pisano said.
“It is unfortunate that the CFTC has now given the go-ahead to a new gambling platform that could be plagued by financial irregularities and manipulation.”
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