Saturday, July 20, 2024

New stock exchange launching in Dallas next year

by BIZ Magazine

(The Center Square) – Wall Street investors have raised $120 million so far to launch a Texas Stock Exchange that will rival the stock exchanges in New York City, The Wall Street Journal first reported.

The reasoning behind their plan to start a new national stock exchange in Texas is a familiar one mentioned by businesses relocating to what many industry groups say is the top state for business: fewer regulations and a better business environment.

TXSE Group Inc., founded and operated by James Lee, told the Journal that he and his investors were “aiming to take on what they see as onerous regulation at the New York Stock Exchange and Nasdaq.”

Registration documents are expected to be filed with the U.S. Securities and Exchange Commission later this year, with the goal of facilitating trades in 2025 and hosting its first listing in 2026, the Journal reported.

The largest investors of roughly two dozen are BlackRock and Citadel Securities.

Lee announced his plan on LinkedIn, saying, “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 the Texas Stock Exchange (TXSE).”

The Texas Stock Exchange will provide a new listing venue for public companies primarily located in the Southeast, exchange-traded products and American Depositary Receipts, the Dallas Morning News reports. Once fully operational, the TXSE will employ roughly 100 people in the Dallas area.

Lee, who is based in Houston, chose Dallas as the location for a national stock exchange where numerous company headquarters have been relocating. He hopes it will be a “more-CEO friendly” alternative to the New York exchanges’ regulations and increasing compliance costs, including those related to Diversity, Equity and Inclusion.

One Nasdaq rule mandates that its listed companies disclose “diversity” information about their boards of directors and explain why they haven’t met a minimum quota for having women, racial minorities or those identifying as LGBTQ+ on them. The SEC approved the rule in 2021 but it was challenged in court and is currently before the Fifth Circuit Court.

Lee thanked Texas Gov. Greg Abbott for his support and reiterated what other CEOs are saying: Texas is the best business friendly state.

Abbott recently spoke at the New York Stock Exchange (NYSE) Summit in Houston, where he said, “People and businesses continue to move to Texas because we offer freedom and opportunities that you can’t get anywhere else. That includes freedom from government overreach, high taxes, and burdensome red tape. Our ability to partner with businesses allows us to attract new investment, which is why we have won the Governor’s Cup for 12 consecutive years for the most business relocation and expansion projects.”

Speaking to a crowd of over 150 business leaders, Abbott highlighted Texas’ pro-business policies that have helped Texas rank first in numerous categories, The Center Square reported.

NYSE Vice Chairman John Tuttle awarded the NYSE Bull Award to Abbott, which the governor immediately renamed the “Longhorn Award.”

In the Journal’s piece, a graphic depicts a Texas Longhorn taking on the charging Wall Street bull, an image many argue symbolizes Texas’ dominance in nearly all economic and financial sectors, now with an eye on a new stock exchange. As businesses and residents continue to leave New York, the reverse is true for Texas.

Texas continues to place first in nearly every top business ranking every year and every month. This year, Texas was named the best state for business for the 20th year in a row; Abbott was recognized as one of the most 100 influential people in the world by TIME Magazine, The Center Square reported.

In April, Texas’ job growth rate tripled the U.S. rate and again set record-high levels for the greatest number of filled jobs, the greatest number of employed Texans, and the largest civilian labor force in state history, The Center Square reported. April marked the 37th consecutive month of positive annual job growth, with growth in 46 of 48 months.

“Texas truly is the Best State for Business and stands as a model for the nation,” Abbott said. “Freedom is a magnet, and Texas offers entrepreneurs and hardworking Texans the freedom to succeed.”

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