http://www.hollywoodreporter.com/hr/content_display/news/e3i411c9da...



While a decision on whether movie futures contracts based on boxoffice will begin trading still pending before the Commodities
Futures Trading Commission, a bipartisan group of 40 congressmen
have signed a letter to the House committee that oversees the
federal commission "to express significant concern" and "offer our
support for efforts to ensure that such futures markets do not
become operational."


Among the members of Congress who signed the letter dated June 8
are Howard Berman (D-Calif.), Joe Barton (R-Texas), Brad Sherman
(D-Calif.), Roy Blunt (R-Mo.), Mary Bono-Mack (R-Calif.), and Dan
Maffei (D-N.Y.).


The letter is part of an effort by the MPAA and others opposed to
movie futures trading to stop the plans by two companies that want
to offer such contracts to institutional and private investors.
Backers have said the futures market would be a way for movie
companies and others to hedge their bets and protect their
investments.


In the letter, the congressmen disagree: "We are not aware of any
entity seeking to hedge such risk and therefore believe that the
intended functions of these new exchanges are for purposes other
than those for which legitimate futures markets exist."


Monday was the deadline for the CFTC to approve or disapprove the
first product put forward, a contract by Trend Exchange aimed at
big investors, which would expire just before the movie opened.
Instead, at the request of the CFTC, a
decision was put off at least until this coming Monday.


That brought a comment from, MPAA executive vp Greg Frazier: "We
appreciate the CFTC's decision to review the application more
closely. We believe both the proposal by Media Derivatives Inc.,
and a separate proposal by the Cantor Futures Exchange L.P., which
is also still pending before the CFTC, serve no public interest
and, to the contrary, can significantly harm the motion picture
industry and impose new, substantial costs that do not exist today.
These are proposals that ought to be under the jurisdiction of the
federal gambling and gaming laws, not the federal commodity trading
laws."


The CFTC has until June 28 to decide on the first product put
forward by The Cantor Exchange, which would be available to small
investors and would be tied to the performance of a movie until
four weeks after its initial release.