AG Drummond says Stock Exchange did the right thing


Attorney General Gentner Drummond is commending the New York Stock Exchange for listening to him and his fellow attorneys general by withdrawing a proposed rule change that would have allowed the listing of “Natural Asset Companies” (NACs) on the exchange.

Drummonded described NACs as a “novel corporate structure” designed to take land off the market to prohibit productive economic uses, which would have negative effects on domestic oil and gas exploration and production.

He had signed on to a Jan. 9 public comment letter joined by 24 other states.

“The strict requirements for NACs would have significantly halted the development of natural resources, particularly energy exploration,” Drummond said. “Such a move would have had severe economic consequences for Oklahoma. I applaud the NYSE for listening to the counsel of this coalition of attorneys general and withdrawing this ill-advised and illegal proposed rule change.”

NACs are a new, untested corporate structure created to lease so-called “ecological performance rights” from landowners, including the federal government. NACs manage “natural assets” in lieu of generating revenue. Any “revenue-generating operations” an NAC engages in must be both “sustainable” and consistent with “its primary purpose” of protecting nature.

Ultimately, NACs can lock up lands from economic uses such as oil and gas exploration, agriculture, logging or mining. The proposed rule change would have allowed NACs to raise capital through listing stock on the NYSE.

In the comment letter spearheaded by attorneys general in Utah and Kansas, the coalition had urged the U.S. Securities and Exchange Commission (SEC) to disapprove the would-be change. They contended the proposal ran contrary to law, exceeded the SEC’s statutory authority, violated the major questions doctrine, and was bad policy.

The letter was also joined by the attorneys general of Alabama, Alaska, Arkansas, Florida, Idaho, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wyoming.

Read the letter here.