Texas Stock Exchange to take on nationwide US stock market
Dallas, Texas - Credit: f11photo / Shutterstock

The New York Stock Exchange (NYSE), Nasdaq and Toronto Stock Exchange (TSE) may be joined by another player in the North American business investment scene – the Texas Stock Exchange (TXSE).

TXSE Group, the parent company of the prospective stock exchange, intends to apply for registration with the U.S. Securities and Exchange Commission (SEC) later this year. The group has already secured the backing of some big names in US finance.

BlackRock – one of the companies instrumental in bringing about the SEC’s approval of the Spot Bitcoin ETF back in January – and Citadel Securities have both contributed to TXSE’s liquidity.

TXSE expects to benefit from both its geographical location but also wider economic changes in the US. The exchange has pointed in particular to changes in equity markets, which it believes provide opportunity for alignment and competition, with issuers and exchange-traded product sponsors demanding greater stability.

A notable recent change in US equities markets saw the introduction of a shorter settlement cycle for securities on 28 May, the T+1 cycle. Whilst the US stock markets are not the only to be feeling this change, the impacts are visible nonetheless.

“Changes in equities trading markets are driving more volume to exchanges and more choices for issuers and sponsors,” explained 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.”

Regarding its geography, TXSE believes that Texas’ standing in the southeastern section of the US makes it a ‘clear choice’ for the creation of a new securities exchange. The state is the second most populous state in the US and has the country’s second largest economy by GDP.

TXSE notes that it is home to more Fortune 500 companies than other states, over 5,200 private-equity sponsored companies and more than 1,500 publicly traded companies. 

Major companies that call the state home include the energy firms ExonMobil, Philipps 66 and Valero Energy, telecommunications firm AT&T and tech developer Dell. 

Companies across the state are active in various industries from traditional heavy sectors like mining to emerging technology areas such as blockchain and finance services such as buy now, pay later (BNPL).

Local trading is not TXSE’s sole goal, however, with the exchange looking to go beyond the borders of Texas to make an impact across the whole of the US South and the nationwide markets. 

Its capital backers will play a key role in this. TXSE notes that its supporters in Blackrock and Citadel account for a large proportion of the equity on existing US exchanges; the platform has so far raised $120m in capital to support its launch and future plans.

Lee concluded: “We’re thrilled to bring to fruition the long-held vision for a national stock exchange in Texas. Texas and the other states in the southeast quadrant have become economic powerhouses. 

“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.”