Texas Stock Exchange Chairman and CEO James Lee [Image: James Lee; domi8nic, flags istock; DI Studio]
Take note, Wall Street: A Dallas-based stock exchange is entering the U.S. equity capital markets, having already raised about $120 million from BlackRock, Citadel Securities and other investors including “prominent business leaders from across the nation.”
TXSE Group today announced plans to launch the Texas Stock Exchange (TXSE), a platform designed to provide U.S. and global companies access to the U.S. equity capital markets. The group describes itself as a “fully electronic, national securities exchange” seeking registration with the U.S. Securities and Exchange Commission and providing “a venue for trading and listing of public companies and a growing number of exchange-traded investment products.”
Plans for “CEO-friendly” exchange with fewer regulations, diversity rules
The Wall Street Journal reported the plan’s launch on Tuesday, saying TXSE Group “aims to take on burdensome regulations at the New York Stock Exchange and Nasdaq” and aims to start trading in 2025 with its first listing in 2026.
The Texas exchange plans to capitalize on disappointment at the New York Stock Exchange and Nasdaq over rising compliance costs, as well as dissatisfaction with rules such as Nasdaq’s board diversity requirements, according to the WSJ.
Aiming for a “more consistent and reliable market”
“Changes in the equity trading market have resulted in increased trading volumes on exchanges and greater choice for issuers and sponsors.” James Lee“Ultimately, the TXSE will increase competition for price movement, liquidity and transparency, creating a more consistent and reliable marketplace that benefits investors, global issuers and liquidity providers alike,” the TXSE Group founder and CEO said in a statement.
According to his LinkedIn profile, Lee has 30 years of experience in the U.S. stock market, alternative investments and governance of large public retirement systems and endowments. He is a managing member of Houston-based JHL Capital Holdings and is a director of the Houston-based firm. From 2009 to 2021.
TXSE Group said plans to open a Texas stock exchange began as changes in the stock market presented “opportunities for greater collaboration and expanded competition.”
“Corporate issuers and exchange-traded fund sponsors are seeking greater stability and predictability regarding listing standards and associated costs,” the group said. “The TXSE seeks to expand access to the U.S. capital markets for all investors, while providing broader access and connectivity for listed companies and those seeking access to public capital.”
Focus on Texas and the Southeast
TXSE aims to launch with a focus on the Southeast United States, which it defines as follows: Texas, Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina and Tennessee.
“I am pleased that we have been able to realise our long-held vision of a national stock exchange. Texas” said Lee.Texas Other Southeast states have become economic powerhouses, and with growing demands from investors and businesses for more alternative ways to trade and list stocks, now is the time to build a large, national stock exchange in the Southeast. Texas. “
TXSE Group, Texas And the country’s southeastern states are leading the nation in economic expansion and population growth, ” Texas “A clear option to establish a new national stock exchange” For decades, Texas The group added that California is among the nation’s leaders in attracting businesses to relocate and expand, is home to more Fortune 500 companies than any other state and has more than 5,200 private equity-backed companies, “many of which are preparing to enter the public equity markets.”
North Texas is home to many Fortune 500 companies
Of course, many Fortune 500 companies are headquartered here in North Texas, including AT&T, American Airlines, McKesson, Energy Transfer, Caterpillar, Kimberly-Clark, DR Horton, Southwest Airlines, Jacobs Engineering, Celanese and Tenet Healthcare.
TXSE Group also noted that there are more than 1,500 listed companies in the target region.
The group said it plans to apply for registration to operate as a national securities exchange with the Securities and Exchange Commission later this year.
Details of the $120 million funding round
TXE Group said that more than 20 investors participated in its fundraising, “including some of the world’s largest financial institutions and liquidity providers.” The group said that liquidity providers “represent a significant portion of equity trading volume on U.S. listed equity exchanges and the majority of U.S. listed retail investor volume.”
The group said that by raising $120 million, the Texas Stock Exchange “is expected to become the most well-capitalized exchange entrant to apply for registration with the U.S. Securities and Exchange Commission.”
Houston-based Woodlock Securities acted as exclusive financial advisor and sole placement agent to TXSE Group Inc. in the capital raising. Based in Washington DC Cravath, Swaine & Moore is serving as regulatory counsel to the Texas Stock Exchange. Dallas Office Haynes Boone LLP acted as advisor to TXSE Group Inc. in the offering and will continue to act as corporate advisor. PwC Consulting is acting as a managed services provider to TXSE Group Inc.
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