Domestic Box Office Receipts Futures

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Domestic Box Office Receipts Futures are contracts based on box-office revenue for movies. On June 15, 2010 the Commodity Futures Trading Commission (CFTC) voted in favor of movie futures contracts on two designated contract markets, the new Trend Exchange, and the Cantor Exchange.

In giving its approval, the CFTC said it found that box-office receipts fit the law's definition of a commodity, that the Trend Exchange contracts weren't "readily susceptible" to manipulation, and that they provided a way of managing risk. The agency's vote was 3-2. Two CFTC commissioners, Bart Chilton and Jill Sommers, voted against approving the contracts for the Trend Exchange.

Although the two exchanges received regulatory approval, the trading of Motion Picture Box Office Futures would never commence.[1] The final version of the Dodd-Frank Act, signed into law July 16, 2010, included a special provision that altered the Commodity Exchange Act to prohibit the trading of contracts based upon "motion picture box office receipts (or any index, measure, value or data related to such receipts)."[2]

Major movie studios, the Motion Picture Association of America (MPAA), and the National Association of Theater Owners had opposed the idea, saying that the contracts would be vulnerable to insider trading, and that rival studios could sabotage films by betting against them. Subsequent to the passage of Dodd-Frank, the Cantor Exchange dropped its plans to develop box-office contracts.

The Trend Exchange has vowed to challenge the ruling, and may try to list such contracts outside the U.S.[3]