Jun 11, 2024 - News

2. New Texas stock exchange

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Illustration: Natalie Peeples/Axios

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

Why it matters: Texas has long fashioned itself as pro-business, and now TXSE Group plans to launch the Texas Stock Exchange (TXSE), which it says would be a more "CEO-friendly" alternative to the New York Stock Exchange and the Nasdaq.

The big picture: The exchange's pitch to investors leans heavily on criticizing the Nasdaq's board diversity rule, according to the Wall Street Journal. But CEO James Lee says the exchange would be apolitical.

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

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

  • A few new exchanges have gotten the green light from the Securities and Exchange Commission in recent years, but regulatory approval could take a while.
  • 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 go for it and bet big on the TXSE because they like the brand and the values it represents — and that could kick off momentum for the new exchange.

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

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