Ban on trading ecological land assets

Summary#

H.R. 1309, the Protect America’s Lands Act, would amend the Securities Exchange Act of 1934. Its stated legal change is to make it unlawful for a registered national securities exchange to effect a transaction in securities issued by a “natural asset company”; the bill states no separate policy goal. It is still a bill, not law.

  • The ban would apply to registered national securities exchanges—not, under this new provision, to every kind of buyer, seller, or trading venue.
  • A natural asset company would be a company that holds rights to the ecological performance of a defined land area, can manage that area for conservation, restoration, or sustainable management, and has one of the specified main purposes for the area.
  • The definition also includes companies that control, are controlled by, or are under common control with such a company.
  • The bill would not itself ban forming these companies, owning land, or carrying out conservation work.

What it means for you#

  • Investors: If the bill became law, a registered national securities exchange could not effect a transaction in a covered company’s securities. The text does not itself bar transactions through every other venue.
  • Companies and their affiliates: Companies meeting the definition, including specified related companies, would be affected by the exchange-trading ban. The bill does not create an application or review process to decide which companies qualify.
  • Landowners and the public: The bill does not itself transfer or take land, or prohibit conservation, restoration, or sustainable management.

Money#

No cost information is in the available material.

  • The bill does not provide an appropriation, fee, or cost estimate.
  • No publicly available information on staffing, enforcement costs, or financial effects is included in the supplied material.

What is unclear#

  • The bill does not define key terms such as “ecological performance,” “natural assets,” or “material adverse impact.”
  • It gives no start date and does not set out how exchanges or companies would determine whether a company meets the definition.
  • It adds no specific penalty or enforcement process. The Securities Exchange Act itself was not supplied, so the existing enforcement rules and how this amendment would interact with them could not be verified.
  • The supplied material does not say whether any such companies currently have securities traded on registered national securities exchanges.

Case for#

  • A possible argument for the bill is that it would draw a clear line: registered national securities exchanges could not effect transactions in securities from companies whose stated purpose and rights concern the ecological performance of land.
  • The ban would also cover companies under common control, which could limit the ability to place covered activity in a related company instead.

Case against#

  • One concern is that the ban applies to the whole defined category, without exceptions based on a company’s specific activities or record.
  • It could limit access to registered national securities exchanges for covered companies and their investors; the bill provides no information about possible effects on financing or investment.
  • The bill does not explain how its key terms would be applied, leaving uncertainty about which companies and related companies would be covered.