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SEC drops proposed rule change at Kobach's urging

Release Date: Jan 17, 2024
TOPEKA – (January 17, 2024) –The SEC is dropping a proposed rule that would have listed natural asset companies, or NACs, on the stock exchange after receiving a comment letter from Kansas Attorney General Kris Kobach.

 “We are pleased that the SEC has withdrawn its proposed rule change. Doing so avoided an unnecessary legal battle,” Kobach said. "My fellow Republican attorneys general will continue to fight against the Biden Administration's unlawful actions whenever they occur."

Under the proposed rule, NACs would allow investors to purchase shares to “actively manage, restore (as applicable) and grow the value of natural assets and their production of ecosystem services.” NACs invest in ‘nature,’ where the only purposed value created is the purported protection of nature.

The letter, led by attorneys general from Kansas and Utah and joined by 23 other states, urged securities commissioners to reject the proposal, because it exceeds the commission’s authority, harms the economy, and endangers U.S. national security.

It would enable foreign actors to obtain perpetual control over public lands, either directly through organizing NACs or purchasing controlling interests in NACs.  

“The national security implications are also breathtaking,” the letter reads. “Foreign ownership of American land by hostile nations such as China…is already creating problems for the country… Unfortunately, nothing in this proposed rule prohibits or would even prevent foreign control of NACs.”

According to the attorneys general comment letter, the commission has no power to act unless Congress authorizes it to do so by statute.

In addition to exceeding the commission’s authority, the proposed rule would enable NACs to “subordinate the interests of millions of Americans to the aims of environmental mandates as well as to the United Nations policies and mandates.”

It would also provide a funding mechanism for the Bureau of Land Management (BLM) to authorize conservation leases that would eliminate productive economic uses, like grazing and logging.

Read the Attorneys General letter here.

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