The US Commodity Futures Trading Commission initiated a public hearing yesterday (May 19) into the feasibility of futures and binary options linked to movie box office receipts.
No vote on the contracts was held, but the watchdog’s commissioners expressed doubts about the validity of the contracts, though they conceded that US law might prevent them from banning them.
In April the CFTC permitted two box office futures exchanges to set themselves up – Media Derivatives Exchange and Cantor Futures Exchange. But there were strong objections from several heavyweights in the US motion picture industry, the regulatory approval was slow in coming, and three of the five commissioners took the unusual step of publicly registering their doubts about the merits of such futures.
The CFTC has not yet approved any contracts for the exchanges, and has insisted that any new contracts they launch must gain its approval.
Yesterday’s hearing centred on...