Texas National Stock Exchange Receives Backing from BlackRock and Citadel
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BlackRock, the world’s largest asset manager and market maker, Citadel Securities, has reportedly supported the launch of a new national stock exchange in Texas on June 4. The Texas exchange is designed to attract listings of exchange-traded products (ETPs) and rival Nasdaq and the New York Stock Exchange (NYSE).
Texas Stock Exchange Aims to Trade and Host Listings in 2026
The Texas Stock Exchange (TXSE) successfully raised approximately $120 million from a mix of individual investors and large investment firms such as BlackRock and Citadel Securities.
JUST IN: BlackRock and Citadel plan to launch a new national stock exchange in Texas to compete with the New York Stock Exchange.
— Watcher.Guru (@WatcherGuru) June 5, 2024
This funding milestone sets the stage for the exchange to move forward with its plans to file registration documents with the Securities and Exchange Commission (SEC) later in 2024.
The new exchange strives to be a suited alternative for crypto-centric firms looking to go public, as it aims to commence trading operations in 2025 and host its inaugural listing by 2026.
In a post on LinkedIn, the Chairman and CEO of the Texas Stock Exchange, James Lee, expressed his excitement and optimism about the exchange’s future.
He stated,
“Texas’s booming economy and the strong economic and population growth among states in the southeast quadrant of the U.S. present incredible opportunities for businesses — and ultimately TXSE.”
A Wall Street Journal report pinpointed the exchange as a more CEO-friendly alternative to alternative exchanges like the New York Stock Exchange (NYSE) and Nasdaq. This move comes in response to mounting regulatory pressures and increasing compliance costs that have become a point of contention for many companies.
It could be recalled that a Nasdaq stock exchange rule, which has been the subject of controversy, mandates listed companies to disclose board diversity details and maintain a minimum number of women, minorities, or LGBTQ+ people on those boards or provide an explanation for non-compliance. While the U.S. Securities and Exchange Commission (SEC) approved this rule in 2021, it faces a legal challenge in the 5th Circuit U.S. Court of Appeals.
NASDAQ to SEC: Require companies to meet Board Diversity Quotas and make Diversity Action Plans so we can boot them from the exchange if they don't comply. https://t.co/xVfeWfxUhY pic.twitter.com/1x5XGmizAJ
— mrs. harrison (@BLUEM0MMY) January 14, 2021
Edward Blum, president of the Alliance for Fair Board Recruitment and one of the rule’s opposition, expressed satisfaction towards the Court of Appeals’ reconsideration. Blum criticized the Nasdaq rule, claiming that it fosters racial discrimination and intrusive personal disclosures, and hopes it will be overturned.
The 5th U.S. Circuit Court of Appeals heard from conservative activists challenging Nasdaq's board diversity rule, with one judge questioning the claim that the U.S. Securities and Exchange Commission put the stock exchange on a "woke mission."
— unusual_whales (@unusual_whales) August 30, 2022
In sharp contrast, the Texas Stock Exchange’s website describes its vision as a “fully electronic, national securities exchange” seeking registration with the SEC, thus offering an alternative to the more traditional exchanges that may be less accommodating to CEOs and businesses.
Texas Stock Exchange Targets Companies in Texas and Southeastern US
In a June 4 interview with the Dallas Morning News, TXSE CEO Lee revealed that the exchange will target companies in Texas, Oklahoma, and the southeastern U.S., including Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Tennessee, North Carolina, and South Carolina.
He emphasized that the Texas Stock Exchange aims to become the third-largest listing platform in the U.S., which could majorly impact Dallas for decades. Lee highlighted Dallas’ strong technology infrastructure, market participants, and network effectiveness as key factors, making it a major financial hub.
He believes the fully electronic Texas Stock Exchange will attract more headquarters relocations and capital to the area, mirroring the city’s trajectory.
Meanwhile, TXSE is expected to secure ETF listings similarly as both the Nasdaq and the New York Stock Exchange have the 11 approved spot Bitcoin ETFs listed on them. This could also spell the possibility of the newly approved spot Ethereum ETFs to be listed on the Texas exchange after their probable launch by June end.
