The head of the upstart Texas Stock Exchange said the state is making a serious play to reshape the US financial landscape, using new pro-business laws and a proposed ban on trading taxes to take on longtime power centers on the East Coast.
Governor Greg Abbott signed legislation this week aimed at strengthening legal protections for companies and curbing shareholder challenges, part of a broader strategy to lure corporate registrations from Delaware. Meanwhile, a ballot measure in November would ban taxes on securities transactions just as a group of New York lawmakers is pushing to bring back a state levy on stock sales.
“Texas is going in direct competition with Delaware and New York, Delaware for registrations and New York for listings and the exchange operators,” Jim Lee, founder of the Texas Stock Exchange, said in an interview a day after attending a signing ceremony with Abbott. The new measures show “the commitment that the state is making to building out capital markets here.”
Lee’s Dallas-based bourse project is backed by the likes of BlackRock Inc., Citadel Securities, Charles Schwab Corp. and pipeline billionaire Kelcy Warren. But for all the progress Lee has made, he still has a long way to go to get the Texas Stock Exchange up and running.
The exchange is still under review by US securities regulators. Lee said approval will potentially come by the end of the third quarter, keeping the schedule on track to begin trading early next year. The exchange will soon have about 60 employees working from a temporary office in Dallas. It’s still shopping for a permanent space, which it plans to announce in the summer.
The industry’s powerful incumbents appear to be taking notice. The New York Stock Exchange announced it would reincorporate its Chicago operations in Dallas to start an equities exchange in Texas. Nasdaq Inc. unveiled a plan to open a regional headquarters in Dallas. Together, the two exchanges dominate US listings.
“It’s flattering and we welcome them,” said Lee, chief executive officer of TXSE Group Inc., the parent company of the Texas exchange. “We’ve been driving this process for years now and we welcome them to the effort. They are formidable competitors.”
Market ‘Flaw’
The TXSE is trying to break through at a time when growing US businesses have been staying private for longer, tapping funding sources such as private equity firms that offer capital without the costs of operating a public company.
Calling such expenses “a flaw in our public markets,” Lee is pledging to offer predictability to listing companies while holding down costs. He has national and global ambitions but says the initial focus will be on companies in the “southeastern quadrant” of the US from Texas to Florida and the Carolinas. Its primary trading platform will be in Secaucus, New Jersey.
“The solution is, you have to have a lot more alignment and predictability for public companies, and we have to drive down cost,” he said.
While the New York proposal to reinstate a tax on stock sales has little chance of becoming law for now, Lee said any future steps in that direction would benefit his state.
Texas is also trying to entice companies to move their incorporation to the state as more executives question Delaware’s status as the gold standard for business litigation. Texas is developing a system of business courts.
Elon Musk won shareholder approval last year to move Tesla Inc.’s incorporation to Texas after a Delaware judge voided his record-setting pay package. His Space Exploration Technologies Corp. also moved its incorporation to Texas from Delaware last year.
Copyright 2025 Bloomberg.
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