The two halves of Congress now have a week to reconcile financial reform in order to impact the approval process
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The movie industry got a big break in its effort to shut down a movie box-office futures market as the Senate voted to approve a financial reform package that would bar the proposed trading.
Now the question is whether the Senate and House can resolve their differences on competing reform packages in time to impact the approval process. Under current law, the Commodities Future Trading Commission has to vote on Media Derivatives’ request by June 7 and until June 28 to vote on Cantor Fitzgerald’s request.
While the Senate version of the bill bars the commission from approving any contracts, that section isn’t in the version the House approved in December.
Democratic leaders after the Senate vote indicated that they were unlikely to reconcile the House and Senate measures by next week — especially with Congress due to break from May 31 to June 4 for the Memorial Day holiday — and it could take as long as late June.
That would be too late to prevent a commission vote on Media Derivatives’ request and leave the movie industry in the odd situation of having to prevent the commission from approving any additional requests to trade box office futures but subject to decisions of the commission on whether to go ahead with the first two requests.
It’s also possible the CFTC could vote and reject or put off the futures contracts, giving Congress more time. At a commission hearing on Thursday, commission staff officials say they are continuing the examine whether box office numbers are truly commodities, whether the Rentrak numbers to be used to help judge box office numbers are subject to manipulation and whether the future could in fact be usable as hedges.
The Motion Picture Association of America and Hollywood unions have questioned all three; Lions Gate has come forward as the lone studio in favor of the futures-trading model.