Jun 10, 2024 - News

Our new stock exchange

Illustration of a globe with geometric shapes with money and map overlays

Illustration: Natalie Peeples/Axios

An upstart Dallas stock exchange hopes to challenge Wall Street's duopoly.

Why it matters: Texas has long fashioned itself as "pro-business," and now the Texas Stock Exchange plans to launch a more "CEO-friendly" stock exchange as an alternative to the NYSE and Nasdaq.

The big picture: According to the WSJ, the exchange's pitch to investors leaned heavily on criticizing the Nasdaq's board diversity rule. But CEO James Lee says the exchange will be apolitical.

  • The TXSE has already raised about $120 million from BlackRock, Citadel Securities, and others.

Zoom in: Dallas-Fort Worth is already a major financial hub, with thousands of people working for Bank of America, JPMorgan Chase, Citi, Fidelity Investments and Wells Fargo — to name just a few.

  • Plus, Goldman Sachs is building a massive office complex in Victory Park as part of its expansion plans beyond New York City.

What they're saying: "Dallas has become one of, if not the most, dominant financial centers in the country, if not the world," Lee told the WSJ.

  • "BlackRock is proud to be a founding investor in the Texas Stock Exchange to increase liquidity and improve market efficiency. ... TXSE is well positioned to capitalize on the Texas economy," the asset manager said in a statement to Axios.

Reality check: The U.S. currently has a handful of exchanges, but business has long been concentrated with the top two. The No. 3 player, Chicago Board Options Exchange, only has about 12% in trading volume market share, while the rest don't even clear 3%.

  • A few new exchanges have gotten the green light from the SEC in recent years, but regulatory approval could take awhile.
  • And, there's little upside for companies to switch exchanges and have to explain that to their investors, Georgetown University associate professor James Angel tells Axios.

Yes, but: It's always possible that a group of CEOs (and big institutional players) decides to just go for it, and bet big on TXSE because they like the brand and values it represents — and that could kick off momentum for the new exchange.

What's next: The company plans to file for SEC approval later this year. It hopes to begin facilitating trading next year and listings in 2026.

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