In early June, the TXSE Group Inc. announced the creation of the Texas Stock Exchange, which will be headquartered in Dallas, Texas. The Texas Stock Exchange aims to rival the New York Stock Exchange (NYSE) and Nasdaq. Backers of the TXSE include prominent names such as Blackrock and Citadel Securities. Thus far, the TXSE Group has raised $120 million.

The Texas Stock Exchange seeks to attract U.S. and global companies to its trading platform, providing them with access to U.S. equity capital markets and facilitating their capital raising efforts. Although it will be a completely electronic trading platform, the Texas Stock Exchange will still have a physical presence in downtown Dallas.

While other regional U.S. stock exchanges have been launched in past decades, none have had lasting success. The Boston Stock Exchange, the Philadelphia Stock Exchange, and the Chicago Stock Exchange were acquired by either NYSE or Nasdaq. Meanwhile, the Cboe Global Markets has not gained enough traction to break into the big leagues.

Recent changes in trading markets and the corporate landscape give the Texas Stock Exchange reason to believe that it has the potential to be a dominant national player. It aims to provide an alternative to the heavily regulated NYSE and Nasdaq stock exchanges. It also plans to stay competitive by offering lower fees and less onerous listing standards. Some have labeled the Texas Stock Exchange as the “anti-woke” stock exchange.

NYSE and Nasdaq impose corporate governance requirements on companies listed on their exchanges. In recent years, Nasdaq has imposed heightened listing standards around boardroom diversity. Nasdaq requires each company listed on its exchange to have a minimum number of women, underrepresented minorities, or LGBTQ+ members on its board or to otherwise explain why it cannot satisfy the Nasdaq requirement. Some companies have criticized the diversity quotas and have expressed concerns that additional requirements will follow on topics such as carbon emissions.

“We’re thrilled to bring to fruition the long-held vision for a national stock exchange in Texas,” states James Lee, the founder and CEO of TXSE Group. “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.”

Texas has experienced rapid economic growth in recent years, fueled by lower taxes and business-friendly policies. It has attracted a number of major businesses to expand or relocate operations to the state. Texas is home to many Fortune 500 companies, including ExxonMobil, American Airlines, and Dell.

“If we look at the three states with the largest economy, New York has two stock exchanges,” states Steven Pedigo, a professor at the University of Texas who focuses his studies on economic and urban development. “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 Texas Stock Exchange plans to file registration documents with the Securities and Exchange Commission (SEC) before the end of 2024. The goal is for trading to commence in 2025 or 2026.