Plans Unveiled to Launch THE TREND EXCHANGE®

BOCA RATON, Fla.--(BUSINESS WIRE)--Media Derivatives Inc. today announced it will launch THE TREND EXCHANGE^® (“TrendEx”), the first federally regulated financial marketplace (“DCM” Designated Contract Market pending ) in the US to offer futures contracts based on domestic box office receipts. The company’s boutique electronic futures exchange and innovative contracts are expected to meet the needs of media and entertainment companies for the 21st century.

“The company aims to infuse a culture of entrepreneurship and innovation into its products and markets to best serve its customers.”

“We are very pleased to announce The Trend Exchange” stated founder and CEO Robert S. Swagger. “Our team has recognized that until now, the opportunity to successfully design and launch such an exchange has not existed; but soon, the film financing industry can benefit from our offering- a solution where demand has significantly increased in part due to the global economic crisis.” Swagger believes that TrendEx represents a new era of opportunity in the futures industry and for Hollywood. “By offering speculators and hedgers a market-based solution to transfer the considerable financial risks associated with major movie productions, The Trend Exchange will perform the same public service that futures exchanges have been providing to commercial users for nearly two hundred years.”

“The business of making movies has changed drastically in the past two decades” stated Ralph Winter, well known producer of films such as X-Men, Wolverine and Star Trek (http://www.imdb.com/name/nm0003515/), “Being a producer in today’s marketplace requires attracting production capital much like the farmers and ranchers did in the last century. I’ve enjoyed being a part of the vision that Rob and his team have developed for The Trend Exchange.”

P. Clark Hallren, Managing Partner of entertainment advisory firm Clear Scope Partners and a 23 year veteran of JPMorgan Chase’s film finance group believes that “A product like what is being provided by The Trend Exchange is precisely what is needed to allow investors or operators to manage the complex risks of the entertainment industry. Applied prudently by sophisticated parties, the volatility of film performance could be more easily managed, thereby making the business more attractive to all parties.”

The approval of the exchange by the Commodity Futures Trading Commission (“CFTC”) is anticipated by March 24. The announcement was made in conjunction with the annual Futures Industry Association (FIA) Conference March 10-13 in Boca Raton.

The Trend Exchange has been privately funded by Veriana (veriana.com). Its directors and advisors include prominent members of the entertainment and financial services industries. In addition, the exchange’s senior management is comprised of many well known professionals from the Chicago futures and options exchange community as well as the entertainment industry.

Swagger said the name is based, in part, on a phrase quoted by professional traders and marketers for generations, “The trend is your friend” whereby participants recognize and take positions based on research and analysis of events.

“The Trend Exchange is an innovator and leader within the futures industry” shared Patrick Catania, a 40 year futures industry veteran and former executive with the Chicago Board of Trade. “I’m pleased to be working with a team that is effectively redefining a trend by offering futures contracts and a trading marketplace for industries that are currently under-served and would benefit from effective price discovery and risk management tools.”

Swagger said TrendEx is operationally prepared, and its staff is working with partners and market participants to ensure a smooth launch of live trading later this year. All aspects of the exchange’s market structure have been designed for institutional investors and follow the traditional methodologies utilized within the industry. Entrance to the platform must come through a qualified futures commission merchant.

“The Trend Exchange is an entrepreneurial exchange with deep relationships in the entertainment industry, the futures industry and academia,” stated Alice Neuhauser, Principle at CRM and highly experienced in the film financing industry, including well known large independently financed films such as Terminator 2 and Cliffhanger in addition to her success in developing LA’s first full-service production facility in over 50 years through a partnership with Roy Disney’s Shamrock Holdings. “The company aims to infuse a culture of entrepreneurship and innovation into its products and markets to best serve its customers.”

By targeting institutional investors, the exchange elevates the commercial value of its contracts, curbing the speculative nature inherent in products that are primarily retail-focused. “Let us be very clear from the outset. The economic purpose of The Trend Exchange is risk management. The primary participants in our markets will be commercial users and professional traders.” Swagger said.

The Trend Exchange’s corporate offices are located in Scottsdale, AZ with an exchange operations office in Chicago. Trading rules and operations will be consistent with those of established futures and options exchanges, including post-trade clearing and settlement, and will be subject to oversight by the CFTC. Swagger states that one of the many successes of TrendEx is the partnerships the company has established. Such partners include the intermediary brokerage firms that meet federal capital requirements who will execute trades as well as the Minneapolis Grain Exchange (MGEX), a nearly 130 year old exchange that will act as a third party to clear and settle trades. “It has been a pleasure to work with The Trend Exchange team” said Mark Bagan, CEO of MGEX “We look forward to building our partnership with TrendEx in bringing these new products to market.”

The company plans to provide greater details regarding its partnerships and products following the final approval of its exchange and products by the CFTC later this month.