New SEC Proposed Investment - NAC

[DaveInDenver]

Natural Asset Companies

If you have not heard of them it is not surprising, the SEC was trying to sneak them in under the radar in a 21-day comment period that originally would have ended on 10/23/2023 but later pushed to 1/2/2024.

A few people noticed and got the comment period delayed again, now Jan 18, 2024. Utah State Treasurer Marlo Oaks is the point on this but a few U.S. Representatives and Senators are also up to speed and at least want public awareness as to what Wall Street wants to do with our land.

The main thrust seems to be to control extraction and resource rights. The accounting wouldn't value the NAC primarily on traditional metrics such as profit-and-loss or share value and would require a new filing, a so-called Ecological Performance Report.

It won't necessarily preventing any land use per se, although the rule proposes that "Therefore, all NACs are prohibited from directly or indirectly conducting unsustainable activities, such as mining, that lead to the degradation of the ecosystems it is trying to protect." that leaves it broadly unspecific. NACs would fully privatize the decisions and bypass public input or scrutiny. Any land is eligible for designation in these NACs, private, local, state or Federal land including National Parks, BLM, USFS, Fish and Wildlife.

From the proposed rule:

"NACs will be corporations that hold the rights to the ecological performance (i.e., the​

value of natural assets and production of ecosystem services) produced by natural or working​

areas, such as national reserves or large-scale farmlands, and have the authority to manage the​

areas for conservation, restoration, or sustainable management. These rights can be licensed like​

other rights, including “run with the land” rights (such as mineral rights, water rights, or air​

rights), and NACs are expected to license these rights from sovereign nations or private​

landowners."​

There's little doubt this will harm rural areas, non-corporate farms and ranches. Not much is mentioned about recreational impacts except for one vague passing reference to revenue generated from eco-tourism. But with the Federal land managers rushing to get onboard without so much as telling us about them it's hard to imagine it as encouraging to free-and-open access. At best it would seem NAC will see use only in Dollar signs weighed against alternative investment based on what revenue lotteries, permits, subscriptions, passes can generate.

SEC.gov | Notice of Filing of Proposed Rule Change to Amend the NYSE Listed Company Manual to Adopt Listing Standards for Natural Asset Companies

www.sec.gov

Mr. Oaks' Wall Street Journal op-ed is pay walled but it's an important flag that was waved to bring attention to it.

https://www.wsj.com/articles/biden-administration-invents-companies-that-cant-make-money-ad71f8f3

https://treasurer.utah.gov/for-utah...designed-to-lock-up-private-and-public-lands/

https://americanstewards.us/natural-asset-companies/

https://justthenews.com/politics-po...-over-rushed-natural-asset-companies-proposal

https://palmettostatewatch.com/natural-asset-companies/

https://thefederalnewswire.com/stor...et-companies-will-cripple-land-use-in-america

 

[MonPetiteShoe]

I have some very strong language when it comes to the idea of "Natural Asset Companies." I'll have to dial some of that back for the actual comment I plan to submit.
As individuals, as a club, as a collective, we need to submit comments opposing this SEC filing. This is a disastrous idea. Fuck's sake.

'The proposed creation of Natural Asset Companies is one of the greatest threats to rural communities in the history of our country,” Treasurer Oaks said. “Under the proposal, private interests, including foreign-owned sovereign wealth funds, could use their capital to purchase or manage farmland, national and state parks, and other mineral-rich areas and stop essential economic activities like farming, grazing, and energy extraction. Recreating on Utah’s incredible natural lands could also face serious curtailment."

...This is appalling.

The good news: All 2,031 current comments are against this filing. Let's bump that number up.

 

[Corbet]

 

[Hulk]

Comments are very against this idea.

SEC.gov | Comments on File No. SR-NYSE-2023-09

 

[Hulk]

I reached out to Ben Burr at Blue Ribbon regarding this issue. He sent me a bunch of stuff:

Blue Ribbon Action Alert - Dec. 6,2023

Oppose the Sell Off of Our Public Lands and National Parks to Wall Street

BlueRibbon Coalition recently engaged on a public rule making proposed by the Securities and Exchange Commission. Yes, you read that right. You might be asking what a financial regulator has to do with BRC’s mission of protecting recreation access to public land? The short answer is that there are

www.sharetrails.org

He actually warned about this back in 2021 (he mentions NACs about halfway down):
https://benjaminburr.substack.com/p/sitlas-trillion-dollar-opportunity

Blue Ribbons public comments (PDF, 5 pages)
https://americanstewards.us/wp-cont...tandards-for-Natural-Asset-Companies.docx.pdf

He says, "I have a good working relationship with American Stewards for Liberty and we’ve all been working to draw attention to this issue."

 

[Hulk]

@stusic -- if we want to harness the our Cruise Moab followers to comment on this issue, we could send out an email to the 2,000 people on our list.

 

[mcgaskins]

I need to do a lot of reading to fully understand what's going on, but I bookmarked this counterpoint article recently:

Conspiracies that Wall Street Will Buy Our National Parks Are Out of Control

We’re fact checking misinformation currently gaining traction on social media

www.outsideonline.com

 

[MonPetiteShoe]

I need to do a lot of reading to fully understand what's going on, but I bookmarked this counterpoint article recently:

Conspiracies that Wall Street Will Buy Our National Parks Are Out of Control

We’re fact checking misinformation currently gaining traction on social media

www.outsideonline.com

The article wasn't incredibly illuminating. I'm still sifting through some of the mentioned sources. It mainly leans into/discusses BRC's sensationalism of this topic (Wall street is trying to take our Lands and sell them on wall street!). While he may not be wrong, the way he's going about it follows the same rhetoric as we've heard parroted for the last decade.
Cast suspicion on dubious Ne'er-do-well's, add catchy headlines akin to click bait, and et voila... Donations. Good intentions, poor execution in my personal opinion.

The outside article seems more to dismantle BRC than the SEC filing itself. It's more of a 'be skeptical of those being skeptical," piece, and "we can be better than that," without really providing detail (read as: Cliff Notes) on how this would effect outdoor recreation, farmers, everyday Americans, and other parties that could purchase NACs.


"The basic concept of an NAC sounds far from evil. The gist is that people currently have the opportunity to invest in stuff that creates pollution, but not the opportunity to put their money into natural ecosystems, which fix pollution, without just buying property. Changing that might help address the climate disaster, or just be a new way for rich people to protect their money from taxation. Who knows!"

Throwing money at climate change issues doesn't solve a problem. It's like paying extra money for a plane ticket because I'm feeling Eco-conscious. You still dump 400 gallons of jet exhaust into the stratosphere. Staying home would have been better for the environment.

I digress.

From the Article:
"I guess my entire point here is that we can and should be smarter than that. The processes and policies that govern public land are available to anyone curious enough to look them up, and open for all of us to participate in. The people responsible for managing our lands are real humans working hard to do their best at difficult jobs. And the way we all work towards a more harmonious future is through facts and reality, not fear and lies."

Excellent point, we should be better than this. I am curious. Oh yes... the shear size of the filing itself makes it incredibly difficult to actually break it all down. This was a platitude disguised as an article. This was an argument against BRC. This was not illuminating to our current problem. It's even possible that this SEC filing would be a large enough malfeasance that all interesed outdoor enthusists could be united. (More platitudes if you got this far.)

In response to Dave:
"NAC is a corporation whose primary purpose
is to actively manage, maintain, restore (as applicable), and grow the value of natural assets and
their production of ecosystem services. In addition, where doing so is consistent with the
company’s primary purpose, the company will seek to conduct sustainable revenue-generating
operations. Sustainable operations are those activities that do not cause any material adverse
impact on the condition of the natural assets under a NAC’s control and that seek to replenish the
natural resources being used."

I don't think we should look at our natural land as a potential for profit. The purpose of the government is to seek the public's best interest, even when balanced against the opportunity costs. The program may lose money, but that does not mean the public is made better for it.
Fire departments, librarys, BLM, all cost more money then they tend to bring in. Our lives are better for it.
If anything, the timeline needs to be extended.

It could just be a complicated tax haven created for the rich under the guise of sustainable natural resources. It could serve to pull more resources in to the private market and thus restrict our access. We all need more clarity.

Here's a comment from Pete Ricketts, Mike Crapo, and James Risch that is significantly more thorough than I could hope to be with my comment.

Here's the skinny on what Pete, Mike, and Jame have to say about NACs:

"We are concerned that corporate involvement in the stewardship and control of our federal lands
would create unintended consequences. The proposed rule could lead to a preservationist-only
approach to federal land management instead of an “all-of-the-above” working lands approach as
intended by the creation of our federal land programs.
We are also alarmed by the SEC’s allowance under the proposed rule of foreign investment in
these uniquely U.S. assets. At a time in which we are actively working to deter our adversaries,
we should not be open our federal lands up to investment from the same adversaries.'

(Edited to include link to Senate comment.)

 

[stusic]

@stusic -- if we want to harness the our Cruise Moab followers to comment on this issue, we could send out an email to the 2,000 people on our list.

We could, but I don't think I could write the copy for it - I just heard about this and there's not a lot of time to form a learned opinion. Personally, I tend to lean against change if it's being rushed or it's very one-sided. Rushed agendas smell shady and one-sided options tend to be unsustainable. I wish there was more time to figure it all out - I like BRC and they fight the good fight, but they tend to be sensationalists about it.

I'm with @DaveInDenver and lean towards a "No" for the same reasons:

Maybe there's value to the idea but it sure demands fleshing out, public debate and clarification.

 

[Inukshuk]

Don't be fooled. This was round 1. They will take the feedback and design the program in a way so that when it gets reintroduced it can withstand the scrutiny.

POCATELLO, ID - Today the Securities and Exchange Commission (SEC) announced that it would be withdrawing the proposed rule to adopt listing standards for Natural Asset Companies (NACs). The proposed rule was originally filed on September 27, 2023. BlueRibbon Coalition (BRC) has been actively providing feedback on this rule, since it was announced. BRC opposes the proposed rule because it would broadly allow for public lands, National Parks, and nature to be privatized. BRC was concerned this proposed rule would lead to loss of management control of public lands to private interests that would reduce public recreation access on public lands. "This is a big victory for those of us who opposed this rule that was quietly introduced into the Federal Register. We appreciate the thousands of our members and supporters who sent feedback to the SEC and to Congress to oppose this rule," Ben Burr, BlueRibbon Coalition Executive Director said. "This shows that our united voice can make a difference." On September 27, 2023, New York Stock Exchange LLC (the “Exchange” or “NYSE”) filed with the SEC a proposed rule change to amend the NYSE Listed Company Manual to adopt a new listing standard for the listing of Natural Asset Companies (“NAC”). The proposed rule change was published for comment in the Federal Register on October 4, 2023. On November 7, 2023, the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change. On December 21, 2023, the Commission instituted proceedings to further review the rule, and on January 17, 2024 the SEC decided to withdraw the rule.

 

[jps8460]

Don't be fooled. This was round 1. They will take the feedback and design the program in a way so that when it gets reintroduced it can withstand the scrutiny.

POCATELLO, ID - Today the Securities and Exchange Commission (SEC) announced that it would be withdrawing the proposed rule to adopt listing standards for Natural Asset Companies (NACs). The proposed rule was originally filed on September 27, 2023. BlueRibbon Coalition (BRC) has been actively providing feedback on this rule, since it was announced. BRC opposes the proposed rule because it would broadly allow for public lands, National Parks, and nature to be privatized. BRC was concerned this proposed rule would lead to loss of management control of public lands to private interests that would reduce public recreation access on public lands. "This is a big victory for those of us who opposed this rule that was quietly introduced into the Federal Register. We appreciate the thousands of our members and supporters who sent feedback to the SEC and to Congress to oppose this rule," Ben Burr, BlueRibbon Coalition Executive Director said. "This shows that our united voice can make a difference." On September 27, 2023, New York Stock Exchange LLC (the “Exchange” or “NYSE”) filed with the SEC a proposed rule change to amend the NYSE Listed Company Manual to adopt a new listing standard for the listing of Natural Asset Companies (“NAC”). The proposed rule change was published for comment in the Federal Register on October 4, 2023. On November 7, 2023, the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change. On December 21, 2023, the Commission instituted proceedings to further review the rule, and on January 17, 2024 the SEC decided to withdraw the rule.

I’m so glad you’re one of the good ones. ❤️

 

[nuclearlemon]

The government will railroad us somehow. They stopped being a government for the people a long time ago

 

[stusic]

At least they'll railroad us slower than the private sector.

 

[Inukshuk]

Aww, were are all bitter old people

 

[IoN6]

Hear this was withdrawn by the SEC 🤘

[edit]
Helps to read all of the posts before replying... @Inukshuk already shared the good(ish) news.
[/edit]

 

[MonPetiteShoe]

Yessir. They scrubbed it on Jan 17th. Here's a link to the SEC filing.

BLUF:

"SECURITIES AND EXCHANGE COMMISSION
(Release No. 34-99355; File No. SR-NYSE-2023-09)
January 17, 2024
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Withdrawal of
Proposed Rule Change to Amend the NYSE Listed Company Manual to Adopt Listing Standards
for Natural Asset Companies."