What You Need To Know About the Blackrock-Backed Texas Stock Exchange

Texas may soon be the home of a new national stock exchange, as the TXSE Group announced plans Wednesday to officially file registration papers with the Securities and Exchange Commission (SEC) to create the Texas Stock Exchange.

The new exchange has raised around $120 million so far from a group of over two dozen investors including Wall Street giants BlackRock (BLK) and Citadel Securities. The exchange would be fully electronic but be headquartered in Dallas, the company said.

TXSE Group Chief Executive Officer (CEO) James Lee told The Wall Street Journal that the group aims to file with the SEC this year, start facilitating trades next year, and begin hosting its own listings by 2026.

TXSE Aims To ‘Be More CEO-Friendly’ Than NYSE, Nasdaq

Those supporting the planned Texas exchange “pledge it will be more CEO-friendly” than the dominant exchanges in New York, the New York Stock Exchange (NYSE) and Nasdaq, the Journal said.

The Texas exchange hopes to benefit from companies that are frustrated with regulations like Nasdaq’s Board Diversity Rule, and increasing compliance costs that come with listing on the exchanges, the Journal reported. Lee told the newspaper that the TXSE is apolitical.

Exchanges based in locations other than New York City used to be more common, but regional exchanges like those based in Boston, Chicago, and Philadelphia were acquired and folded into the NYSE and Nasdaq over time. Several smaller exchanges still exist across the U.S., but handle much less trading activity than the NYSE and Nasdaq.

Texas Has Become Growing Business Hub

The TXSE Group said that Texas is “home to more Fortune 500 companies than any other state,” making now an “opportune time” to establish the exchange, Lee said.

“Texas and the other states in the southeast quadrant have become economic powerhouses,” Lee said. “Combined with the demand we are seeing from investors and corporations for expanded alternatives to trade and list equities, this is an opportune time to build a major, national stock exchange in Texas.”

Texas’ role in the business community has been in the spotlight in recent years as a number of high-profile tech companies like Tesla (TSLA) and Oracle (ORCL) have shifted their headquarters from California to the state.

Tesla shareholders are set to vote at next week’s annual shareholder meeting on a number of issues, including whether the company should leave Delaware to re-incorporate in Texas after a Delaware court ruled against the company and its multibillion-dollar pay package for CEO Elon Musk.