By Juliana Vasquez | Staff Writer
The U.S. stock market just got a Texas-sized addition. The Texas Stock Exchange received approval from the United States Securities and Exchange Commission to launch a new stock exchange, with TXSE set to begin trading stocks by early 2026.
The new venture is backed by major financial firms such as Citadel Securities, Charles Schwab and BlackRock, seeking to compete against other national stock exchanges like the Nasdaq composite and the New York Stock Exchange.
Dr. Shane Underwood, Baylor professor and Pat and Thomas R. Powers Chair in Investment Management, said TXSE is branded to welcome all the businesses currently flocking to Texas.
“It’s to capitalize on this sort of excitement around Texas,” Underwood said. “[There are] a lot of big financial companies moving to Dallas or expanding their operations there.”
An October Texas Tribune article stated that, “Texas is home to the headquarters of the second most Fortune 500 companies in the country, leading New York and closely trailing California.”
Additionally, the energy sector has boomed over the last couple of years, and Underwood said this growth would likely be largely represented in the TXSE.
“Energy is going to be disproportionally represented in the Texas Stock Exchange … given the energy presence in Texas,” Underwood said.
In terms of introducing a new exchange to the market, Underwood said the benefit of increased competition largely outweighs any risks that may be presented.
“There’s really not much risk of introducing a new exchange, just more competition,” Underwood said. “From an end user perspective, like a student wanting to trade stocks, they really won’t see a difference in anything.”
The emergence of this new exchange only highlights the importance of competition in a free market, Underwood said. Furthermore, he mentioned that technology has transformed the field of investments.
“It’s really a different world than we were in just a few years ago, where so much of the trading actually happened on the floor of the exchange,” Underwood said. “It was very active, and now pretty much everything happens electronically.”
Kirkland, Wash., sophomore Zach Hayton said watching TXSE unfold is an exciting opportunity for finance students like him.
“Watching a new exchange launch from the beginning is a rare chance to see how market rules, regulation and innovation develop in real time, [which] makes finance feel active and changing,” Hayton said.
For finance students like Hayton, the new exchange creates unique opportunities available right down I-35.
“Having a major stock exchange in Texas means more internships, research and industry contacts nearby,” Hayton said. “It could also attract more financial firms, advisors and investment funds to the area, creating more jobs for students after college.”
For students who may want to be early investors in TXSE, Underwood said to keep an eye out for which stocks begin to list.
“It’s so early still, they’re not planning to launch trading until 2026, so just see how many companies actually choose to list there,” Underwood said. “You might want to support a local stock exchange.”