The Texas Stock Exchange has been talking a big game about stealing business from the established financial centers. Now it has something real to point to.
Two small exchange-traded funds with a Texas focus are moving their primary listing to the new Dallas exchange, marking the first time any fund will call TXSE its home.
Texas Capital Bancshares announced Tuesday that it will move its Texas Equity Index and Texas Oil Index funds off NYSE's Arca platform and onto TXSE. The switch is expected in September, pending regulatory approval.
The funds track the growing universe of companies that call Texas home. Rob Holmes, chief executive of Texas Capital, said the move lines up with the exchange's Texas-first mission, calling it a chance to pair "our ETFs with an exchange that reinforces Texas' position as a leading destination for businesses, investment and talent."
The Texas Equity Index launched in July 2023 and holds about $39 million in assets. It has slightly trailed the S&P 500 since its start.
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The Texas Oil Index, which began in December 2023, is worth $14 million and holds oil and gas producers active in the state, including ConocoPhillips and ExxonMobil.
TXSE has raised more than $300 million from backers that include JPMorgan Chase and Citadel Securities, the firm led by Ken Griffin. Full trading has begun, and the exchange is targeting an initial public offering sometime in early 2027.
That timeline shows how hard it is to crack the grip NYSE and Nasdaq have on the market. The incumbent exchanges still dominate U.S. stock trading, and companies have long chosen them to reach investors, build brand recognition, and market themselves in places like Times Square and downtown Manhattan.
The New York exchanges have noticed the threat. Both have strengthened their own Texas operations in response to TXSE's push.
The bottom line: This is a symbolic win for TXSE more than a financial one. Two small funds do not move the needle against the trillions of dollars trading on the established exchanges. But the first listings give the upstart exchange a story to tell as it courts bigger fish.
For most investors, this does not change much right away. Your fund provider is not switching venues overnight, and the funds themselves are tiny.
But it is worth watching where this goes. If TXSE can land real companies for its first IPO in 2027, it would give investors a third choice for where stocks trade. More competition between exchanges can mean better prices and tighter spreads on trades, which is good for anyone buying or selling.
The bigger picture is that Texas is becoming a financial force on its own terms. As more companies move their headquarters there, the money is following. Whether that translates into a true rival to the traditional exchanges remains to be seen, but the foundation is being laid now.
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