BlackRock backs Texas Stock Exchange to challenge NYSE

TXSE Group says national exchange based in Dallas will attract global companies

The Wall Street Bull near the New York Stock Exchange. AFP

A group backed by BlackRock and Citadel Securities on Wednesday announced plans to launch a stock exchange in Texas, challenging the New York Stock Exchange to try to attract foreign companies.

TXSE said it raised about $120 million in capital and will file to register with the US Securities and Exchange Commission this year.

The group said it will be a “fully electronic, national securities exchange” based in Dallas.

In a statement, the TXSE Group said the Texas Stock Exchange will enable US and global companies access to US equity capital markets.

“Changes in equities trading markets are driving more volume to exchanges and more choices for issuers and sponsors,” said James Lee, founder and chief executive of TXSE Group.

TXSE intends to hold its first listing in 2026, The Wall Street Journal first reported.

The arrival of TXSE would come decades after regional exchanges in Boston, Philadelphia and Chicago joined Nasdaq or the NYSE, the two standard stock exchanges in the US.

Large companies have been lured to the conservative US state in recent years from progressive states California and New York.

Elon Musk's Tesla moved its headquarters to Texas in 2021, and he is asking shareholders to move the company's articles of incorporation from Delaware to the border state.

Oracle and Hewlett Packard have also made the move to Texas, and JP Morgan now employs more workers in the Lone Star state than in New York.

Texas had a net immigration of more than 7,200 companies and nearly 103,000 jobs from 2010 to 2019, according to the Federal Reserve Bank of Dallas.

The state credits its friendly tax rates, emergence as a major tech centre and its dominance in the US energy sector as reasons companies are seeing it as a beneficial business partner.

The Journal reported the exchange would be friendlier to executives who have faced stronger regulations at Nasdaq and the NYSE.

“Texas and the other states in the south-east quadrant have become economic powerhouses,” Mr Lee said.

“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.”