A group backed by Wall Street heavyweights BlackRock and Citadel Securities is planning to start a new national stock exchange in Texas, aiming to take on what they see as onerous regulation at the New York Stock Exchange and Nasdaq.
The Texas Stock Exchange, which has raised approximately $120 million from individuals and large investment firms, plans to file registration documents with the Securities and Exchange Commission later this year, CEO James Lee told The WSJ.
The goal is to begin facilitating trades in 2025 and host its first listing in 2026.
The exchange is aiming to tap in to disaffection with increasing compliance costs at Nasdaq and NYSE and newer rules like one setting targets for board diversity at Nasdaq.
Backers of the TXSE, as it is known, pledge it will be more CEO-friendly.
Also behind the move is a shifting U.S. corporate landscape, with dozens of companies moving to states with more favorable regulatory and taxation policies.
Texas is tied for second with New York in terms of the number of Fortune 500 companies, just behind California.
Exxon Mobil, AT&T and American Airlines are based in Texas. Goldman Sachs broke ground last year on a Dallas campus that it said could house more than 5,000 employees.
“Dallas has become one of, if not the most, dominant financial centers in the country, if not the world,” Lee said.
For months, talk has been swirling in trading communities about an upstart, “anti-woke” exchange launching in Texas. Lee says the exchange is apolitical.
TXSE will be entirely electronic, but it plans to have a physical presence in downtown Dallas, said Lee, a Texan who has worked in finance and trading for around three decades.
The exchange plans to compete for primary and dual listings. The TXSE also hopes to attract listings of exchange-traded products.
Getting the new exchange off the ground would be no mean feat. NYSE and Nasdaq have an effective duopoly in U.S. corporate stock listings.
Other exchanges, including IEX and Cboe Global Markets, have tried to break into the stock-listings business but they have gained little traction.
The Long-Term Stock Exchange, which was approved by the SEC in 2019, has two listings.
Decades ago, there were dozens of regional stock exchanges outside of New York, but they either shut down or were acquired by larger players.
The Boston Stock Exchange, the Chicago Stock Exchange and the Philadelphia Stock Exchange are among those that were folded into the parent companies of the NYSE and Nasdaq in the last 20 years.
