Jan. 16, 2024
To all involved at the SEC: I am urging the SEC to NOT allow the NYSE to list “Natural Asset Companies” or NACs, pursuant to File No. SR-NYSE-2023-09. I am a capitalist to my core, but believing in free markets requires some 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 cannot be enabled. It is clear that from an investor protection perspective, NACs bastardize the capital markets for a political objective. NACs are not only a “new type of company”, something that is highly irregular and should require much scrutiny, but also have employed their own type of accounting system. This comes directly from the creator of the “NACs”, IEG’s Chairman & CEO, who 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.” Even if they use GAAP accounting within NAC financial reporting, their hubris that there is some separate accounting measures to be used within the financial markets raises too many red flags to count and should be immediately disqualifying. NACs 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 whatever their own definitions of those activities are. As you well know, there is a very clear reason that a company goes public. It is 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 take on. Companies are supposed to have strong merits and provide a path to growth for public investors in exchange. It is a rigorous and costly process both to become public and to stay public, and it is not for every business. These NACs are a bastardization of that purpose. They aren’t seeking to manage resources to improve their earnings potential, rather they would often be seeking to remove the productivity Glenn Child