The New York Stock Exchange (NYSE) withdrew its proposal that would pave the way for “Natural Asset Companies” (NACs) to become a new type of financial product on Wednesday, according to the Securities and Exchange Commission (SEC).
The SEC had been considering a NYSE proposal to allow NACs to be listed and traded on the NYSE, a policy which would permit American lands and ecosystem services to serve as the basis for a novel financial product. The agency announced Wednesday that NYSE had withdrawn the proposal, ending the potential privatization of America’s public lands and associated risks for energy and national security, at least for the time being.
The SEC’s notice of the withdrawal did not specify the particular reasons that motivated the NYSE to abort its effort to bring NACs to market. The NYSE had partnered with the Intrinsic Exchange Group (IEG), a for-profit company backed by interests including the Rockefeller Foundation, to advance the NAC proposal.
“After reviewing feedback from regulators, market participants and others, we have withdrawn our proposed rule filing to enable the listing of Natural Asset Companies,” a spokesperson for the NYSE told the Daily Caller News Foundation. “We appreciate the work of Intrinsic Exchange Group, which approached us with the idea of creating this new asset class, as well as those who took the time to study this proposal and share their views with us.” (RELATED: Green Firm That Advised SEC On Proposed Emissions Rule Sold Carbon Credits From Chinese Region Known For Slave Labor)
NAC Proposal Withdrawal Notice by Nick Pope on Scribd
Had the proposal gone into effect as a final rule, NACs would have been a brand new type of company aiming to improve ecosystems and ecosystem services of public or private lands, according to the NYSE’s proposal. Those ecosystems and their services would be the underlying value for NAC equity that would be tradable on the NYSE.
Opponents of the rule raised concerns that NACs could pose potential problems for property rights, as well as effective land management, productive economic uses of federal land and national security. The House Natural Resources Committee launched a probe of the proposal last week, citing concerns about productive land use and management as well as private interests potentially taking control of public lands.
Thirty state-level financial officials sent a comment letter to the SEC on Tuesday morning about the rule, urging the agency to reject the proposal because they considered it to be an “attempt to create economic value from processes not backed by economic activity.” The officials also expressed their concerns that the proposed novel accounting standards for NACs would not be suitable for U.S. capital markets, and that a lack of extensive restrictions on foreign investment could allow adversarial interests the opportunity to use NACs as a vehicle to hamper American energy security and economic development.
“IEG believes NACs are an important innovation and is committed to advancing NACs in the private markets. As an important tool for farmers, investors, sustainability, and conservation, we remain committed to NACs being traded in the public market so all investors have access to this tool,” Peter Kadushin, a spokesperson for IEG, told the DCNF. “We look forward to correcting misconceptions about NACs as the public sees the potential as the first NACs progress to market.”
The SEC referred the DCNF to the NYSE when reached for comment.
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