TXSE - a new American stock exchange in Texas

A new national stock exchange based in Dallas and backed by "Wall Street heavyweights" such as BlackRock and Citadel Securities will become a competitor to the world-renowned New York Stock Exchange (NYSE) and Nasdaq, according to CNN.

Newly formed TXSE Group, the parent company of the Texas Stock Exchange, recently announced plans to file for registration with the US Securities and Exchange Commission (SEC) later this year. The group is backed by numerous investors with $120 million in funding.

"We are excited to realize what has been the vision of a national stock exchange in Texas," TXSE Group founder and CEO James Lee said last week, noting, "Texas and the other states in the Southeast they became economic powers. With the demand we are seeing from investors and corporations for expanded alternatives to trading and listing stocks, this is an opportune time to establish a major national exchange in Texas."

TXSE hopes to benefit from the more than 5,200 private equity-backed companies in the region that may wish to list.

Lee told The Wall Street Journal that the new group hopes to officially launch the exchange in 2026.

America has lost half of its listed companies since the 1990s. In 1996, there were 8,000 companies on US exchanges. Today, that number has dropped by more than 50% to just 3,700, according to data from the Center for Securities Pricing Research. According to CNN, the emerging problem is not that America now has half the number of listed companies 30 years ago, but that companies are increasingly choosing to go private (unlisted). Heightened reporting requirements, higher litigation expenses, costly regulations, quarterly earnings pressure, among other things, have driven companies away from public stock markets.

According to economists at Wells Fargo, there are now five times more private equity-backed firms in the US than listed companies, and the trend has been increasing for some time.

"Companies that remain private can avoid the burden and cost of regulatory requirements and focus on long-term strategic plans," Wells Fargo economists say.

TXSE Group said in a press release that it hopes to help partially alleviate this burden.

TXSE points out: "Corporate issuers and sponsors of exchange-traded products are demanding more stability and predictability in terms of listing standards and associated costs. TXSE intends to expand access to the US capital markets for all investors, while providing increased access to those seeking access to public capital."

While the most popular exchanges in the US are in New York, there are about 13 stock exchanges across the country, including Philadelphia and Miami. TXSE will primarily serve to list companies in Texas and the southeastern United States.