Cantor to drop movie exchange in face of looming government ban

Cantor to drop movie exchange in face of looming government ban

Despite receiving regulatory approval, Cantor Fitzgerald appears set to abandon plans to launch an exchange for trading movie box office receipt contracts after lawmakers moved to ban the practice.

The Commodity Futures Trading Commission (CFTC) this week approved the proposed contracts for the new Cantor Futures Exchange in a 3 to 2 vote.

In a statement, the CFTC says it found that the terms and conditions of the proposed "Domestic Box Office Receipts" futures contract on Sylvester Stallone-starring The Expendables submitted by Cantor do not violate the Commodity Exchange Act.

Another firm, Media Derivatives, has also recently received CFTC permission to launch its Trend Exchange platform.

But the planned exchanges have come under sustained attack from a coalition of entertainment industry players, who have lobbied hard against them on Capitol Hill.

The coalition, which includes the Directors Guild of America and the Motion Picture Association of America (MPAA), says the platforms risk "rampant speculation and financial irresponsibility".

The opposition concerns appears to have been heeded, with language that bans the trading of the contracts added to the financial overhaul bill approved by legislators this week, making the CFTC approval irrelevant.

Richard Jaycobs, a Cantor Fitzgerald executive told the Los Angeles Times: "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. The bill is quite clear."

Cantor may still look to develop other financial products for the entertainment industry, Jaycobs told the Times.

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