Congress has approved an amendment banning the trading of derivatives based on box office results. The amendment was approved just before 1 a.m. EST on Friday by a House-Senate conference committee for inclusion in the Wall Street reform bill, media reports say.
According to The Hollywood Reporter, Committee chair Rep. Barney Frank (D-Mass.) said during a short discussion that while there had been controversy about movie futures, the House conferees were not going to exercise their option to alter the amendment banning movie futures trading.
Both chambers of Congress will almost certainly pass the bill prior to summer recess on July 2.
The amendment had been strongly supported by the MPAA, Hollywood talent guilds, major movie exhibitors and others.
On the other side of the fence are Veriana, the company that operates Media Derivatives, which has been planning to launch the Trend Exchange and Cantor Fitzgerald, owner of the Hollywood Stock Exchange, which aims to launch a similar market.
Media Derivatives had won approval from the Commodities Futures Trading Commission on June 15 to offer its first contracts to investors. The new law would appear to cancel that plan, although Veriana/Trend Exchange CEO Robert Swagger indicated earlier this week that his company will likely file a legal challenge to the bill.
On Monday, the CFTC is likely to approve a second plan for Cantor Fitzgerald to trade the futures, The Wrap notes.
Swagger has insisted Media Derivatives intends to move forward with its trading, which will likely force a court challenge either by MPAA or a government agency.