DALLAS — The Texas Stock Exchange will begin trading Monday, launching a phased rollout that marks the first operational test of the Dallas-based exchange as it seeks to compete with the New York Stock Exchange and Nasdaq.
The Texas Stock Exchange (TXSE) will initially allow approved members, including broker-dealers, banks and trading firms, to trade test stocks. The exchange will gradually activate trading symbols for thousands of publicly traded stocks and other securities throughout July, allowing public trading as the rollout progresses.
TXSE said it plans to begin listing exchange-traded products (ETPs) during the third quarter and corporate listings during the fourth quarter.
The exchange aims to establish Dallas as a financial center while expanding Texas’ financial services industry and providing companies with another venue to raise capital.
“With the start of full production trading, any last notions that TXSE is theoretical are instantly swept away,” a TXSE official said in a statement.
Sriram Villupuram, an associate professor of finance at the University of Texas at Arlington, said the initial trading period will demonstrate whether the exchange’s technology performs as expected.
“This is the first demonstration,” Villupuram said. “It’s like a new car, a brand new company pushing out their first car. I think they’ll get through it fine, but things can go wrong. This is a high-tech exchange at the end of the day.”
Ray Perryman, president of The Perryman Group, said Texas has both a growing investor base and a large concentration of publicly traded companies that could support a new exchange.
“A homegrown national exchange means more jobs, more investment, and more growth opportunities for businesses and communities across the Lone Star State,” Gabriela von zur Muehlen, senior vice president and chief policy officer at the Texas Association of Business, said.
TXSE announced its plans in June 2024 with $120 million in backing from investment firms including BlackRock and Citadel Securities. The exchange has since secured federal approval and increased its funding to $275 million.
State officials have promoted the exchange as part of Texas’ expanding financial sector.
“The center of gravity for American capitalism is now headquartered in the boom belt,” Gov. Greg Abbott said during a TXSE event in April. “The Texas Stock Exchange is the natural extension of that capitalism.”
Since TXSE announced its plans, both the New York Stock Exchange and Nasdaq have launched Texas-based branches.
Villupuram said TXSE will likely need years to establish itself as a competitor because of the experience and market position of the two established exchanges.
He said the launch of NYSE Texas and Nasdaq Texas reflects the growth of Texas’ financial sector.
“There is genuinely business to be made here, and part of it can also be a fear of missing out,” Villupuram said.
Perryman said Texas has become a major financial services hub, with 939,600 financial sector jobs, more than New York or California.
“Texas has evolved from being primarily a back-office location into a major hub for technology, operations, wealth management, trading support and increasingly some front-office and investment banking functions,” Perryman said.
TXSE will operate as a fully electronic exchange while maintaining its headquarters in Dallas. The company recently leased office space in the Bank of America Tower in Uptown Dallas.
The exchange has announced several exchange-traded products but has not yet identified companies that plan to list their shares. TXSE officials said corporate listings are expected later this year.
Villupuram said attracting corporate listings will be essential because exchanges generate much of their revenue through listing fees.
TXSE plans to make all National Market System symbols, including those for companies such as Tesla, available for trading by the end of July.
The exchange said it will not hold a ceremonial opening bell on Monday but hopes to stage one after completing its initial rollout.