The Club for Growth Foundation, an organization known for advocating economic freedom and limited government, has expressed concerns to the Securities and Exchange Commission (SEC) regarding a proposed rule change sought by the New York Stock Exchange (NYSE). The proposed rule pertains to Natural Asset Companies (NACs), and the Foundation argues that this could cause the SEC to deviate from its mission as established by Congress in the Securities Exchange Act of 1934.
According to the Foundation, exchanges like the NYSE primarily exist to facilitate transparent and efficient trading of securities. They argue that the proposed rule, which is aimed at addressing environmental and conservation goals set by the Biden Administration, strays from these intended purposes.
The NYSE seeks to adopt listing standards for NACs with an aim to address "overconsumption of and underinvestment in nature." However, according to the Foundation, these goals fall outside of what is covered by securities laws and are not part of an exchange's mission.
On October 4th, in collaboration with the Intrinsic Exchange Group (IEG) and in partnership with the NYSE, the SEC proposed new investment vehicles known as "Natural Asset Companies (NACs)." According to Federal Newswire, this proposed rule would allow federal lands, including national parks, to become part of NACs. These NACs would be granted significant "management authority," while also allowing foreign interests, including China, to create and invest in NACs. This could potentially grant them influence over U.S. federal lands and profits from their protection.
In a letter sent on December 18th by Foundation president David McIntosh, he argued against SEC involvement in conservation efforts. McIntosh stated that such efforts should be left to other agencies and entities such as the Departments of Agriculture and Interior.
The Foundation further contends that the proposed rule could mislead investors. They claim that NACs do not align with traditional investment expectations and lack the profit-driven motive that defines financial activities covered under securities laws.
The letter also highlights concerns shared by other groups and some policymakers about potential distortions in local markets and economies that may result from the proposed SEC rule. Under this rule, lands placed under NACs would face restrictions on their usage, including limitations on traditional activities like farming, ranching, and timber and minerals management.
The Foundation's letter also raises concerns over the NYSE's ownership interest in Intrinsic Exchange Group Inc., the organization pioneering NACs. According to the Foundation, this close association between the NYSE and its subsidiary could potentially lead to a conflict of interest.
As stated on its website, the Club for Growth is a national network of over 500,000 pro-growth, limited government Americans who believe that prosperity and opportunity come from economic freedom.
