Jan. 12, 2024
To all involved at the SEC: I strongly urge the SEC to NOT allow the NYSE to list “Natural Asset Companies,” or NAC's, pursuant to File No. SR-NYSE-2023-09. I support capitalism, but believing in free markets requires ground rules, which cannot and must not be manipulated to keep the playing field level and fair and to engender positive outcomes. The continued efforts to financialize productive natural resources to subvert the legal system, to pervert the capital markets, and to cause harmful outcomes for both investors and the US alike must not be enabled. From the perspective of protecting investors, NAC's clearly bastardize the capital markets for political objectives. Not only are NAC's a “new type of company,” but they also employ their own type of accounting system. This comes directly from the creator of the NAC's, IEG’s Chairman & CEO, who has said, “We created a new accounting system, which we called Statements of Ecological Performance, which account for the flow of ecosystem services in financial terms (Source: https://investinginregenerativeagriculture.com/2022/11/29/douglas-eger/…). Even if GAAP accounting is used within NAC financial reporting, the hubris that there are separate accounting measures to be used within the financial markets raises many red flags and should be immediately disqualifying. NAC's seek to use others’ money, including that obtained via the capital markets, to buy the ability to control or “manage” productive public and private land and other natural resources. Their stated purpose in doing so is not to make a profit OR to be productive, but rather to protect, conserve, restore, and preserve these natural “assets,” based on creative definitions of those activities. There is a very clear reason that a company goes public: to broadly access capital to provide both funding for growth and liquidity for existing investors, providing opportunities for investors to participate in future growth for the risk they assume. In exchange, companies are supposed to have strong merits and provide a path to growth for public investors. It is a rigorous and costly process both to become public and to stay public, and it is not for every business. NAC's bastardize that purpose. They aren’t seeking to manage resources to improve their earnings potential. Rather, they would often be seeking to remove the productivity of assets in the name of so-called "climate justice." This would obviously impact our country's ability to generate and access energy, critical minerals, water, and food. It could also put those decisions in the hands of institutions, such as foreign governments and their sovereign wealth funds, who could invest in these NAC's and have de facto control over our country’s resources. The focus on the SEC is protecting investors. NAC's allow investor funds, particularly those deployed through entities that they may not control, such as pension funds, to be used to decommission resources and make them non-productive for POLITICAL means. Americans and the SEC must not allow that to happen. If you have any questions on whether this is a political tool meant to subvert the legal process, read the words of IEG’s Chairman, who said, “We were looking for a private-sector approach that wasn’t dependent on policy, it wasn’t dependent on traditional taxes, regulation or philanthropy to price in these assets and give investors the opportunity to invest directly in nature, whether that’s for climate or biodiversity (Source: https://eenews.net/articles/invest-in-nature-might-be-possible-with-natural-asset-companies/…)." The bad outcomes here will include the loss of the fiduciary duty to do what is in the best interest of investors. Critical natural resources will be subject to the consolidation of a handful of wealthy and powerful individuals. Even worse, control of productive resources, as well as our food supply, water, energy, tourism, and more, could end up in the hands of foreign nations and their sovereign wealth funds or other bad actors. The SEC must ensure that capital markets are free and fair for everyone and have the interests of all investors at heart. Please do not allow NAC's to access our capital markets via NYSE listings or otherwise. Thank you for your consideration. Ann Makar Vancouver, WA