Strike two!
Despite Hollywood attempts to bat down the proposals, a second exchange proposing boxoffice-based commodity trading has won preliminary approval by the Commodity Futures Trading Commission. The CFTC on Tuesday said the proposed Cantor Exchange has passed muster in a review of its online technology.
The commission previously approved similar technical underpinnings of the proposed Trend Exchange.
The CFTC also must rule on product details of the exchanges, which the major film studios stridently oppose. So though the first two decisions have gone against Hollywood, the MPAA and other industry groups continue to press their fight against the proposals.
Both Cantor Exchange and Trend Exchange had planned to begin trading by this week, but their launches have been delayed pending final regulatory review.
Cantor Exchange proposes to allow direct access to its online exchange, where users would buy contracts selling boxoffice projections, long or short, from six months prior to films' wide releases through the first four weeks pics play in theaters. Trend Exchange would use brokered trades and halt trading once movies hit theaters.
In addition to lobbying the CFTC, Hollywood has opened a second front in its fight against the proposed exchanges in Congress.
A Hollywood-backed amendment recently was added to the Wall Street Transparency and Accountability Act -- a financial-reform Senate bill -- to prohibit boxoffice commodity exchanges. The amendment is set for discussion Wednesday by the Senate Agriculture Committee.
On Thursday, a House subcommittee on farm commodities that oversees the CFTC also will review the two exchange proposals.
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