Financial giants BlackRock and Citadel Securities have invested $120 million in creating a national stock exchange headquartered in downtown Dallas. Though there are still several steps to go before it’s officially launched, the Texas Stock Exchange looms in Dallas’ future and experts believe it could change the city for years to come.
Some believe it could solidify Dallas’ reputation as the financial center of the South and attract more businesses and jobs to the city and state, but questions remain about whether it can become a viable competitor to institutional investors like the New York Stock Exchange and Nasdaq.
Still, most experts believe Texas Stock Exchange CEO James Lee will have a positive impact on Dallas if he receives approval for registration from the U.S. Securities and Exchange Commission, as he aims for the exchange to have its first listing in early 2026.
Mark Cuban, a Dallas billionaire and minority owner of the Dallas Mavericks, has said he has no plans to list his company on the exchange, but is one of many who support a listing on the exchange.
“I think this is a great, smart idea and will be great for Dallas,” Cuban said in an email. Dallas Morning News“Not only will it bring jobs, but it will improve needed digital infrastructure, bring attention to Dallas-based businesses, and perhaps most importantly, it will provide a foundation for people to get a better financial education. There’s no doubt that schools will be a place to embrace kids, even if it’s mostly just servers. I’m a big fan of the concept.”
Lee wants the Texas Stock Exchange to become the third-largest listed exchange in the United States, a huge challenge as it will have to compete with big institutional investors like the New York Stock Exchange and Nasdaq.
While many local stock exchanges have come and gone over the years, Lee believes Texas’ diverse industries and the state’s growing workforce will energize him and the Texas Stock Exchange.
“I’m a proud Texan and have been focused on this for decades, and it’s really Governor Abbott’s leadership that came up with the idea that has led to where we are today,” Lee said. “This project is bringing together the market structure, the expertise and the professionals. It’s very exciting and the impact will be felt for decades to come.”
Changing the culture of Dallas
The Texas Stock Exchange plans to have 100 employees based out of executive offices at an undisclosed location in Dallas’ downtown district.
But experts like David Choate, chief operating officer of Dallas-based brokerage CAPIS, believe the impact of the Texas Stock Exchange won’t be felt in the direct jobs it would bring to the region.
“Sorry, but adding 100 people downtown isn’t going to change everything,” he says, “but we’ve seen this cultural change over the last 30 years. It’s more about giving Dallas credibility as a financial market. Dallas has always been the financial center of the Southwest, but this change really solidifies Dallas’ position as a competitor to New York and Chicago.”
If the Texas Stock Exchange helps transform Dallas into a cultural financial center like New York or Chicago, experts predict more outside companies will look to Texas for headquarters and office space, said Amir-Hossein Fard, an assistant professor of finance at the University of North Texas.
“I think this could make Dallas a more attractive opportunity for local firms, especially in the finance and legal consulting sectors that have close ties to the stock exchange,” he said. “We’re already seeing signs of this with Goldman Sachs’ new campus, but it could also lead to a proliferation of high-profile financial events and conferences, which could drive new development, but it could also drive up real estate values.”
Dallas is already a major financial center in the United States, housing the Federal Reserve Bank and 24 Fortune 500 companies, and is welcoming dozens of new, wealthy residents.
The city of Dallas is trying to attract more city-based businesses through initiatives such as Proposition G, a $72 million proposal for the 2024 Dallas bond package that would allow the city to use incentives to lure businesses there.
But while the Texas Stock Exchange is an effective symbol of financial prestige, some believe it is not enough to attract new businesses to the region.
“I’m not sure that the possibility of companies being able to list their stock on a Texas stock exchange will lead to them relocating their headquarters,” said Thomas George, Bauer professor of finance at the University of Houston, “but it does give people an opportunity to identify with Texas if they so choose.”
The Texas Stock Exchange’s strategy is to target companies in the southeastern U.S., from Texas to Florida, for listing, and the financial transaction tax has prompted more companies to look outside the Northeast, making Dallas a potential big winner.
“Given Texas’ recent economic success, it’s entirely possible that companies would be open to listing on a Texas stock exchange, especially if the rules and protocols are attractive,” said Ray Perryman, CEO of the Perryman Group, a Waco-based research firm. “The biggest challenge will likely be overcoming the inertia of New York’s long-standing presence and reputation.”
Can the Texas Stock Exchange compete with the New York Stock Exchange and Nasdaq?
The Texas Stock Exchange has a big challenge competing with the New York Stock Exchange and Nasdaq, but the state of Texas has some competitive advantages that could give the Texas Stock Exchange an edge.
Gov. Greg Abbott is one of Lee’s assets.
He has proposed banning financial transaction taxes, will appoint seven judges to Texas’ new Business Court, and portrays himself as a pro-business governor who will protect corporations from burdensome regulations. Texas has no corporate or personal income taxes. Governor Abbott is, unsurprisingly, a supporter of the Texas Stock Exchange.
“Texas is America’s economic powerhouse, so it was only natural that Texas should launch its own national stock exchange. Governor Abbott is proud to work with new Texas Stock Exchange CEO James Lee and his team to make this dream a reality,” Abbott’s press secretary, Andrew Maharelis, said in a statement. news.
“Business leaders are relocating and investing in Texas at a record pace because we build the framework that allows free enterprise to thrive and hard-working Texans to prosper,” he said. “In Texas, we will continue to cut red tape and protect industries from harsh restrictions that kill jobs and unnecessary regulations that burden innovators in other parts of the country.”
“Governor Abbott is not going to run this. This is a private company run by a board of directors, and the board will make decisions independent of the governor,” George, the University of Houston professor, said. “But the brand image of being located in Texas sends a message to companies that list here about our intentions regarding additional requirements that are not required in Texas.”
