Stock Exchange pulls 'natural assets companies' SEC proposal amid backlash from state officials

The New York Stock Exchange on Wednesday withdrew a proposal to the Securities and Exchange Commission that would have created "natural assets companies" amid pushback from state officials.

NACs were a proposed type of company that would have been created for the purpose of purchasing land and blocking its "unsustainable extractive activities," according to Utah Treasurer Marlo Oaks. The SEC initially held a three-week comment period on the proposal, which drew scrutiny from state financial officers due to its "unusually brief" duration and led to the regulator reopening the rule to public comment in December.

An SEC filing reviewed by Just the News indicates that the stock exchange withdrew the proposed rule change on Wednesday.

Critics of the proposal had objected on myriad grounds, including the potential for misuse or nonuse of natural resources, ethics concerns, and administrative overreach.

"The resulting conversion of investor money into unusable wildlands has the potential to be one of the most significant misallocations of capital in history," Oaks wrote of the potential impact last year.

The withdrawal of the rule came the same day that more than 30 state financial officers submitted a comment letter objecting to the proposal.

"The fatal flaw underlying the concept under consideration is the attempt to create economic value from processes not backed by economic activity," the group, led by Alaska Commissioner Adam Crum wrote to the SEC. "We believe that the value of the good provided by nature is undeniable, but unquantifiable. If it is made quantifiable, even using crude and arbitrary methods (as this proposal would do) then it takes what is thought of as a 'public good,' like air, and makes it a private commodity from which people can profit at the expense of others. This is a terribly dangerous idea."

The rule's termination prompted celebration from its detractors.

"We are pleased the SEC has withdrawn its proposed rule change," said Kansas GOP Attorney General Kris Kobach. "Doing so avoided an unnecessary legal battle. My fellow Republican attorneys general and I will continue to fight against the Biden administration’s unlawful actions whenever they occur."

Justin Bis of the Financial Fairness Alliance, for instance, said "as one of the leading early voices sounding the alarm on the SEC's absurd Natural Asset Companies proposal, the Financial Fairness Alliance applauds the decision today to shelve this ill-conceived idea that was cooked up by the global elites in Davos and force-fed to the American people through this unaccountable agency."

"We hope this proposal is dead in the water as it was rife with potential ethics issues and overreach. However, this was just the latest bad concept emanating from today's SEC so we will remain vigilant in defending against further efforts to expand this agency's statutory mission," he added.

State Financial Officers Foundation CEO Derek Kreifels, said "had [the stock exchange] succeeded sneaking it through, as it seemed they would before state financial officers petitioned Chairman Gensler last month, the consequences for America could have been dire."

"I’m grateful for all who helped raise the alarm on this attempted land grab by climate alarmists, and thankful for today’s corrective from the NYSE, but we must continue to be vigilant in defending our communities and states from future efforts that would seek to upend what has made this country great in pursuit of radical political agendas," he went on.

Ben Whedon is an editor and reporter for Just the News. Follow him on X, formerly Twitter.