BlackRock and Citadel Back Texas Stock Exchange Set to Launch in 2025

• The Texas Stock Exchange (TXSE), backed by Citadel and BlackRock, will launch in 2025 with a $120M investment.
• TXSE aims to attract businesses with a fully automated exchange in Dallas, leveraging Texas’s growing economy and lower compliance costs.
• Crypto community welcomes TXSE, as BlackRock’s Larry Fink emphasizes the transformative potential of ETFs and tokenization for financial instruments.

The Texas Stock Exchange (TXSE) is planned to open in Texas with the support of top investment companies such as Citadel Securities and BlackRock. The exchange is expected to have less onerous regulatory demands than the NYSE and Nasdaq, which the current CEOs may find more objectionable.

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The TXSE has received more than $120 million of capital from over two dozen investors. Leading supporters include Citadel Securities and BlackRock, known for their involvement in new and exciting financial ventures.

James H. Lee, the Chairman and CEO of TXSE, disclosed these firms’ participation in a recent LinkedIn post. The exchange plans to submit registration papers with the US Securities and Exchange Commission (SEC) later this year, with operations set to commence in 2025 and the first listings in 2026.

Texas has been working hard to attract more financial firms in recent years. Creating Texas Business Courts as a competing structure to the Delaware Court of Chancery is another step that can be highlighted. This is evident with Tesla’s recent decision to consider relocating its incorporation from Delaware to Texas.

Lee noted that Texas’s economy and population are expected to continue growing, especially in the southeastern region of the United States, which is a promising area for business and the new stock exchange.

Electronic Trading with a Physical Component

The TXSE will be a fully automated national securities exchange with a physical office in Dallas. It aims to provide primary and dual listings, including exchange-traded products. This is likely to take advantage of increasing disenchantment with the compliance costs associated with the NYSE and Nasdaq. The exchange will focus on companies in the southeastern region of the US and will use Texas’s strong economy to lure business.

The crypto community has welcomed the development, particularly given BlackRock CEO Larry Fink’s optimism about Bitcoin exchange-traded funds (ETFs) and tokenization potential. Fink has emphasized the transformative potential of ETFs for all financial instruments and has integrated the iShares philosophy into BlackRock’s operations.

The TXSE aims to offer a regulatory environment that is more conducive to businesses, addressing rising compliance costs and regulatory dissatisfaction at existing exchanges. A Nasdaq rule requiring listed companies to disclose board diversity information, approved by the SEC in 2021 and now facing a federal court challenge, exemplifies the regulatory challenges the TXSE aims to mitigate. 

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