Why was the proposal withdrawn? An NYSE spokesperson told Newsweek that, "[a]fter reviewing feedback from regulators, market participants and others, we have withdrawn our proposed rule filing to enable the listing of Natural Asset Companies." I randomly checked out some of the comment letters that were submitted on the proposal. While there were certainly some that favored the proposal and even offered technical comments and suggestions, most of the comment letters that I saw were quite negative—references to "Satan," (that's always a bad sign), "land grab by elites," "ponzi scheme," "hostile foreign powers," "'rights grabbing' idiots" who "sit in dark rooms thinking of ways they can make rules that tie our hands and yet make no sense at all," and "what the heck is wrong with you people?" You know, the usual.
Some of the opposition, however, was quite serious and some reflected an organized effort, such as a letter from 25 attorneys general who argued that the proposed rule exceeded the SEC's statutory authority, in part because it did not protect investors and the public interest but rather "threaten[ed] substantial harm on multiple fronts." In addition, the AGs contended that the proposed rule would work in unison with and serve as a "funding mechanism" for a rule recently proposed by the Bureau of Land Management, which the AGs believed would "lock up land to prohibit productive economic uses." They maintained that the NYSE rule was "part of an interlocking scheme designed to facilitate another agency's [the BLM's] violation of the law." One Congressman, a member of the House Committee on Natural Resources, wrote to say that "NACs contradict both public lands and securities law....The NYSE has financial interests in IEG and a seat on its board, with IEG being 'entitled to a share of the revenues generated by the Exchange from the listing and trading of NACs on the NYSE,'...an unusual business relationship to say the least. This proposal is thus not in the best interest of the U.S. or the investing community, but solely in the best interest of the entity proposing the change and its business partner." The Idaho State Treasurer's office argued that the "proposals for NACs to acquire 'ecological performance' rights on public resources is alarming. This concept stands to vastly disrupt the current regime of land management, and the public participation in management decisions mandated by federal law, by enabling non-government corporate control over activities that occur on public lands. Allowing ecological interests in federal lands to be monetized and traded by private investment portfolios could lead to outcomes on public lands harmful to the very communities where these resources are located."
The Chair and CEO of the IEG told Newsweek that "most of the criticism was based on misinformation about the Natural Asset Companies, or NACs. 'I think there were the misconceptions that NACs would lock away resources or force government controls onto private lands, and none of that is accurate....When you start with misinformation, those conspiracies can grow and we got caught up in it.'"
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