Dago translation of the article by Paul Cobler for “The Texas Tribune”
Texas Stock Exchange – Borsa del Texas
The Texas Stock Exchange has cleared its final hurdle toward the goal of becoming a direct competitor to the dominant New York Stock Exchange and Nasdaq.
The September 30 announcement that the U.S. Securities and Exchange Commission (SEC) approved the Dallas-based startup’s permit to operate as a national stock exchange was greeted with enthusiasm by Texas lawmakers, including Gov. Greg Abbott, who said, “Texas is quickly becoming the financial center of America.”
Texas Stock Exchange – Borsa del Texas
Excitement around the Texas Stock Exchange, or TXSE (pronounced “Tex-ee”), has been building since June 2024, when plans to launch the new exchange with an initial capital of $120 million were announced, backed by large investment firms such as BlackRock and Citadel Securities, making it one of the most financially sound attempts to establish a new national exchange in decades.
TXSE executives say the strength of the Texas economy made the project possible, pointing to the number of Fortune 500 companies that have moved to the state, attracted by favorable regulations and tax policies.
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Texas is now home to the second-highest concentration of Fortune 500 corporate headquarters in the United States, surpassing New York and approaching California.
“Texas is a major player in the United States, regardless of the stock market landscape, but ultimately it makes sense — being the seventh largest economy in the world,” said Nicole Chambers, global director of securities, speaking to a group of Dallas business leaders in September, adding that 45 countries smaller than Texas have their own stock exchanges.
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“Texas has really become a leader in where you can do business,” Chambers said during a panel discussion at the University of Texas, Austin campus. “That’s why the Texas Stock Exchange exists. We couldn’t have done it in Oregon or Nebraska.”
When TXSE launches — it’s expected to debut next fall — it won’t be the only exchange based in Dallas, either. After TXSE announced plans to seek SEC approval, the New York Stock Exchange said in February that it would reincorporate its Chicago electronic exchange and move it to Dallas, renaming it NYSE Texas.
Bill Bailey, TXSE’s general manager of market intelligence, said he sees that decision as a reaction to the creation of TXSE, also noting that Nasdaq in March announced it was opening a regional headquarters in Dallas.
These moves will test whether Dallas’ recent growth as a financial services hub is enough to justify the city’s new nickname: “Y’all Street.”
CAN A NEW STOCK EXCHANGE ATTRACTE COMPANIES TO LIST?
Texas Stock Exchange – Borsa del Texas
Stock exchanges are private institutions where stocks, bonds and other financial instruments are traded, linking supply and demand “like any other market,” said Sriram Villupuram, an associate professor of finance at the University of Texas at Arlington.
The famous bells that begin trading on the NYSE and Nasdaq remain etched in the public’s memory, but these events are largely public relations operations, as the two exchanges compete to convince companies to list on their stock exchanges.
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After the NYSE acquired the American Stock Exchange in 2008, the NYSE and Nasdaq became the two dominant exchanges in the United States, effectively creating a duopoly, Villupuram explained.
Regional exchanges outside New York, such as those in Boston, Philadelphia and Chicago, have been absorbed by the parent companies of NYSE and Nasdaq, while others have been closed.
Attempts to create a third major national stock exchange have so far failed, failing to attract a significant number of companies willing to list.
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TXSE leadership says this time will be different. The new exchange will be entirely digital, but will have a physical presence in Dallas, Bailey said. TXSE also plans to hold trading opening ceremonies for its companies and incorporate much of the pomp and circumstance of its two rivals, with a distinctly Texas twist, he added.
With $120 million in backing from investors such as BlackRock and Citadel Securities, Bailey said the digital exchange will be cutting-edge and have fewer requirements on board composition than other exchanges. TXSE also aims to capitalize on discontent with new rules, rising fees and stock price parameters imposed by Nasdaq and NYSE.
BLACKROCK’S LARRY FINK AT THE CERAWeek CONFERENCE in Houston
Much of TXSE’s success will depend on the patience of its investors, Villupuram said. It will take time to convince companies to go public, but each new company will increase the credibility of the project. How quickly TXSE can attract the top 50–100 companies will be crucial, he added.
“This will give those who are thinking of going public an idea of what it takes to get on the stock exchange, and from there the effect could snowball,” Villupuram said.
WALL STREET
TXSE executives say the initiative’s success will also depend on the health of the Texas economy. If growth continues, Texas will continue to attract large corporations and financial firms, which TXSE may look to recruit.
Although the majority of stock transactions today take place digitally, physical proximity to large companies remains crucial for a stock exchange, Villupuram further explained.
“In stock trading, demand and trades are now automated, electronic, whatever we want to call them, but supply — that is, courting companies to go public — is still very human,” he said.
“THE LANDSCAPE IS CHANGING”
Texas Stock Exchange – Borsa del Texas
Historically, Dallas has been a commercial hub due to its location in the Sun Belt, becoming Texas’ major hub for communications, transportation and finance as the state modernized. This vocation has continued with the growth of Texas businesses and the expansion of Dallas-Fort Worth International Airport, which has become a national hub, explained Ray Perryman, president of the economic research firm The Perryman Group, based in Waco.
“Dallas is the natural location for the emergence of a financial center in this region,” Perryman wrote in an email.
WALL STREET
Large investment banks such as JPMorgan Chase and Goldman Sachs now have tens of thousands of employees in the region and continue to grow. Goldman Sachs is building a $500 million tower in downtown Dallas that will house more than 5,000 employees, becoming its largest center outside of New York, according to the company. Charles Schwab moved its headquarters from California to Dallas in 2020.
Over the past two decades, employment in the investment and securities industry has grown only 16 percent in New York, while in Texas it has increased 111 percent, Perryman said.
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The lower cost of living than the Northeast also makes Texas attractive to employees, like Sasha Stratton, risk manager for Selby Jennings in Dallas and the Southern United States. The company does recruiting for financial services companies across the country. Stratton moved to Dallas five years ago from her home state of New York, seeking the opportunity to purchase a home and enjoy a higher quality of life with fewer expenses.
“Companies are prioritizing hiring in Dallas over New York in many cases, and I think that’s a pretty unique change,” Stratton said. “It is driven by talent availability, operating costs, real estate availability and, with the Texas Stock Exchange and other exchanges following suit, the recognition that it is not a compromise to expand in Dallas, but a smart strategic choice to take advantage of a booming economy.”
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The shift in economic activity southward, coupled with the vast financial resources of TXSE backers, suggests the new exchange could become a formidable competitor to the NYSE and Nasdaq, Perryman said.
The launch of TXSE, along with the expansion of NYSE and Nasdaq in the area, will make it easier for growing Texas companies to access capital, allowing for further expansion and new hiring, Perryman added, creating a virtuous cycle that benefits both stock exchanges and the Texas economy as a whole.
WALL STREET
“New York will likely remain the primary center of stock markets for the time being, but the landscape is changing,” Perryman concluded.
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