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  • Writer's pictureRealFacts Editorial Team

Texas Is Set To Create Their Own Stock Exchange: 10 Facts to Know


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The New TXSE Stock Exchange


The Texas Stock Exchange (TXSE), a new venture backed by more than two dozen investors, including Citadel Securities and BlackRock, aims to compete with the New York Stock Exchange (NYSE) and Nasdaq. Announced in 2023 and founded by TXSE Group IncThe TXSE will be a fully electronic national securities exchange headquartered in Dallas, Texas, planned to be fully operational in 2026. The exchange plans to expand market access for all investors and facilitate public capital access, merging the south west region of the United States and possibly Mexico closer to do business in those regions.


Early Wednesday June 5th the CEO of TXSE James H. Lee posted this on his Linkedin below. See the full commentary through this link (22) Post | Feed | LinkedIn.


James H. Lee social media post

10 Facts you Need to Know


1. **Funding and Infrastructure: The TXSE has raised $120 million in capital and intends to register with the Securities and Exchange Commission (SEC) later this year. The company will employ approximately 100 people at that time.


2. Operations Timeline: The TXSE plans to begin facilitating trades in 2025 and host its first listing in 2026. It aims to provide primary listings, dual listings, and exchange-traded products (ETPs).


3. Economic Context: Texas boasts a $2.4 trillion economy, making it the eighth-largest globally. The state has attracted numerous business relocations and expansions, including major corporations like Tesla and Toyota. This robust economic environment is a significant factor in establishing the TXSE.


4. Background on Regional Exchanges: Historically, regional stock exchanges have struggled, often merging with larger entities like the NYSE and Nasdaq. The TXSE is attempting to buck this trend by leveraging Texas’s economic growth and attracting conservative-minded firms.


5. Potential Political Dimensions: While TXSE Group Inc. asserts the exchange is apolitical, the context of its launch amidst a conservative backlash against "woke capitalism" has led to speculation. Notably, Citadel’s CEO, Ken Griffin, has been vocal about his opposition to "woke ideology." Despite this, BlackRock, and its CEO Larry Fink, that other major investor, is often viewed as part of "woke capitalism,” for implementing strategies that contain ESG, which has received a backlash from their right wing investors recently.


6. Competitive Landscape: The U.S. stock exchange market is dominated by NYSE and Nasdaq, which account for over 35% of the trading volume. The TXSE will face significant competition from these established exchanges, which have absorbed numerous smaller exchanges over the years.


7. Investor Sentiment and Trends: The number of publicly traded companies in the U.S. has halved since the 1990s, with many firms opting to stay private due to regulatory burdens and costs associated with public listings. The TXSE aims to alleviate some of these burdens by providing more stability and predictability around listing standards and associated costs.


8. Market Positioning: TXSE Group Inc. plans to target businesses in Texas and the southeastern United States, hoping to benefit from the region's significant number of private equity-sponsored companies that may seek public listings.


9. High Frequency Trading: TXSE may come to be a target for High Frequency Trading Hedge funds, as it stands as a middle ground in the US. The economy of Texas is forming around Technology which can further this possibility as well with the fact that it is a totally electronic exchange.


10. Corporate Reactions and Outlook: Some experts believe the TXSE’s potential political affiliations could attract firms critical of sustainable practices and stringent

regulations. However, others emphasize the exchange’s promise of lower compliance costs as its main attraction. The success of TXSE will largely depend on its ability to offer competitive advantages over existing exchanges.


The Barebones


In summary, the Texas Stock Exchange represents a bold attempt to introduce a new player into the U.S. stock exchange market, leveraging Texas’s economic strengths and potentially tapping into a politically conservative market segment. Its success will hinge on its ability to provide a favorable trading environment compared to long-established giants like the NYSE and Nasdaq.

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