A coalition of financial entities and investors, including giants such as BlackRock and Citadel Securities, has pooled approximately $120 million to hatch a new stock exchange rooted deep in the heart of Texas. In seeking to erect an alternative to the titan pair of the New York Stock Exchange and Nasdaq, these firms have their eyes set on a Dallas headquarters for the proposed Texas Stock Marketplace (TXSE), as per a report by the Texas Tribune.
The venture, backed by around two dozen investors, is now knocking on the doors of the U.S. Securities and Exchange Commission, striving to secure the nod to commence operations later this year. In a statement obtained by the Texas Tribune, James Lee, the founder and CEO of TXSE Group, weighed in, “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,”
TXSE promises a more CEO-friendly environment, aiming to exploit the growing dissatisfaction stemming from ruling compliance costs at incumbent exchanges. The move is timely; Texas has witnessed a population and economic spurt, a potential draw for businesses. Steven Pedigo, a professor of economic and urban development at the University of Texas at Austin's LBJ School of Public Affairs, told the Texas Tribune, "If we look at the three states with the largest economy, New York has two stock exchanges. Texas, comparably to California, is growing economically and demographically really fast, and already has a big number of Fortune 500 biggest companies headquarters, so it makes sense Dallas would be an ideal place."
The figures tell a fervent tale of the Lone Star State's allure among businesses. Between 2010 and 2019, Texas became the home state for more than 7,200 firms, ushering in nearly 103,000 jobs, according to the Federal Reserve Bank of Dallas. Major companies like Tesla and Toyota have staked their flags in Texan soil, with financial behemoths like Goldman Sachs Planting roots in Dallas. Pedigo chimed in, asserting the new stock exchange wouldn't necessarily translate to a spike in job creation but would reinforce the state's pro-business reputation.
The envisioned TXSE still has high walls to scale in challenging the dormant dominion of NYSE and Nasdaq, which have commanded the U.S. listings market for eons. Market data indicates that NYSE accounted for over 20% of equity trading volume in May, with Nasdaq not far behind at 15%. Nevertheless, the robust financial muscle behind TXSE could signify a significant market shift and, indeed, a riveting financial chronicle in the making, as suggested by Pedigo's articulated views.
Disclosure nods to the University of Texas at Austin and the University of Texas at Austin - LBJ School of Public Affairs for their financial support of the Texas Tribune, affirming that donors have no sway over journalistic content. A full list of such backers can be found on the publication's website.
