A new Texas-based stock exchange has set its sights high with plans to capture the state’s business boom and compete with New York’s Stock Exchange and Nasdaq.
On Wednesday, a group backed by a few big investors including BlackRock and Citadel Securities, TXSE Group, Inc. announced its plans to start its stock exchange in Texas. The future billionaire-backed stock exchange has over two dozen investors funding the exchange to the tune of $120 million, in hopes of providing a new trading and listings venue for public companies, ETPs, and ADRs.
In a press release,, the group announced it plans to file its registration with the U.S. Securities and Exchange Commission and begin operating as a national securities exchange later this year, and begin facilitating trades by 2025.
Strong Economic Growth in Texas
Over the past decade, Texas has experienced fast growth in its business sector, luring 300 corporate headquarters to take root in the larger-than-life state.
Group founders say that Texas’s booming population and stable economic forecast make the state the perfect place to launch TXSE.
“Texas’s booming economy and the strong economic and population growth among states in the southeast quadrant of the U.S. present incredible opportunities for businesses — and ultimately the Texas Stock Exchange,” TXSE Group Inc. founder and CEO James Lee said in a post on LinkedIn.
According to Lee, the goal for the exchange is to position itself as a rival to the New York Stock Exchange and the Nasdaq and create more competition around quote activity, liquidity, and transparency.
Businesses in the state of Texas are excited about the prospect of having a stock exchange based in Dallas. They see the state’s growing financial services as added credibility to the fact Texas has become a bustling business epicenter.
High expectations
The Texas-based stock exchange is one of a handful of proposed regional stock exchanges with the goal of opening up the U.S. capital markets. So far, many of these regional stock exchanges including the Philadelphia Stock Exchange and Chicago Stock Exchange have failed and eventually combined with the NYSE and Nasdaq.
According to a press release, the group maintains that TXSE will be a “fully electronic national securities exchange” that seeks to expand access to U.S. capital markets “for all investors while providing greater access and alignment for public companies and those seeking access to public capital.”
“Changes in equities trading markets are driving more volume to exchanges and more choices for issuers and sponsors,” said James Lee, founder, and CEO of TXSE Group Inc. “TXSE will ultimately create more competition around quote activity, liquidity and transparency, resulting in more consistent and reliable markets that benefit investors, global issuers and liquidity providers alike.
Is Texas the Next Gotham?
In a recent New York Post opinion piece, Allison Schrager at City Journal warned “The new Texas Stock Exchange is another sign,” that New York is “losing its dominance in finance.” The industry “is what made Gotham’s growth into one of the world’s greatest cities possible,” but “the link between New York and finance has weakened” as finance has evolved to make “physical presence” less salient. “Jobs, in finance and other industries, have moved south — especially to Texas.”
Plus, “the TXSE is promising to cut red tape and regulations” imposed by the New York exchanges. New York leaders beware: “Technology that enables people to do their jobs anywhere, zero state income taxes, and Texas’s better business climate” all “stand as warnings that New York can’t take finance for granted anymore,” continued Schrager.
TXSE has also gained the support of the Texas Association of Business (TAB) President & CEO Glenn Hamer released a statement saying,
“We are encouraged but not surprised to see top financial services leaders recognize what we have known for years: Texas is quickly becoming an epicenter for the financial services industry. TAB fully supports the important effort to establish Texas as the home of the newest national stock exchange through the creation of the Texas Stock Exchange (TXSE).”
