Texas Stock Exchange: A New Challenger in the U.S. Equity Markets

The U.S. equity markets are about to welcome a new player: the Texas Stock Exchange (TXSE). In a bold move, TXSE has submitted paperwork to operate as a national securities exchange, aiming for a 2026 launch. The company hopes to disrupt the New York-dominated industry and reverse the shrinking number of publicly traded companies by tackling the high cost of going public and remaining on exchanges.

TXSE's parent company, TXSE Group Inc, announced the filing of its Form 1 registration with the U.S. Securities and Exchange Commission (SEC) on Friday, January 31, 2025. The filing proposes trading, listings of corporate issuers and ETPs, auctions, and a range of data products. The exchange aims to provide greater alignment with issuers and investors and address the high cost of going and staying public.

TXSE has received $161 million in capital from over four dozen investors, including prominent financial institutions such as BlackRock, Citadel Securities, Charles Schwab, and major U.S. market makers and trading firms like Jump Trading. The exchange plans to launch trading in early 2026, with listings by the end of the same year.

TXSE's headquarters will occupy part of a new building in Dallas, which will include executive offices, a conference center, and an "iconic bell-ringing venue." The exchange is positioning itself as a challenger to the Nasdaq and the New York Stock Exchange, long the country's leading securities marketplaces.

TXSE faces several regulatory hurdles in its quest for SEC approval, including market structure and competition, listing standards, order matching engine, data products, capitalization, transparency and disclosure, and timeline. By addressing these challenges and working closely with the SEC, TXSE can increase the likelihood of a successful launch in 2026.

To differentiate itself from established exchanges like the NYSE and Nasdaq, TXSE plans to offer a more CEO-friendly environment, lower costs, and higher listing standards. By targeting frustrated companies seeking a more business-friendly exchange and reducing compliance costs, TXSE can attract listings and trading volume.

TXSE's geographic advantage, being based in Dallas, allows it to tap into the growing economic power of Texas and the southeast quadrant of the United States. This region is home to more Fortune 500 companies than any other state and has a strong foundation of support with nearly 1,000 public companies and 14,000 sponsor-backed companies.

To foster innovation and competition in the U.S. equity markets, TXSE can employ several strategies, such as offering competitive fees and services, improving market access and liquidity, innovative listing standards and auctions, expanding access to capital markets, and collaborating with major investors and market makers.

In conclusion, the Texas Stock Exchange is poised to become a significant player in the U.S. equity markets, challenging established exchanges and offering a more CEO-friendly environment, lower costs, and higher listing standards. By addressing regulatory hurdles, differentiating itself from competitors, and employing innovative strategies, TXSE can revitalize competition for issuers and create a world-class trading platform for all market participants.