Financial giants plot new national stock exchange based in Dallas

A decades-long Dallas dream may soon be realized. Texas is looking to welcome its first national stock exchange.

After raising approximately $120 million from dozens of individual investors and big-time firms like BlackRock and Citadel Securities, Texan James Lee is starting the Texas Stock Exchange as its CEO. On his current timetable, he hopes it will make its first trade in late 2025 and put up its first listings in early 2026.

The Texas Stock Exchange will be a new listing venue for public companies, primarily in the Southeast of the United States, exchange-traded products and American Depositary Receipts. By the time it’s fully operational, it will employ 100 workers in the Dallas area.

Though Lee is based out of Houston, Dallas was the obvious pick for a national stock exchange. It’s a region that’s undergoing a population boom full of the ultra-wealthy to middle-class citizens, and Dallas is trying to add more companies to its list of headquarter relocations.

Like how D-FW International Airport brought an unforeseen level of prosperity to the region, Lee thinks the fully electronic Texas Stock Exchange will do the same, driving more headquarters relocations and capital to the area.

The Texas Stock Exchange will focus on attracting companies in Texas and Oklahoma and the southeast quadrant of the U.S., including Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Tennessee and North and South Carolina.

“We aim to be the number three listing venue in the U.S.,” Lee said. “It is exciting; it’s transformational. Frankly, it could change the arc of Dallas for decades. It’s the density of this technology infrastructure, market participants and the network effectiveness that makes Dallas a major financial hub.”

Key among Lee’s list of people he wanted to thank for the monumental moment was Governor Greg Abbott, who recently rung the closing bell at the New York Stock Exchange. Without his ambition to bring a stock exchange to Texas, this would have remained a dream, Lee said.

“Without question, the reason we’re here today is Governor Abbott’s leadership,” he said. “We were just the team that were able to bring this together. We had the right institutional support and, candidly, the right plan and people to make this a reality. But it starts with Governor Abbott’s leadership, and it predates us.”

In 2020, the New York Stock Exchange considered a move to Texas when New York state officials discussed whether to tax stock trades through a financial transaction tax. It never went through and neither did the NYSE’s move to the Lone Star State.

Still, the NYSE and its president, Lynn Martin, have kept their eye on Texas, noting it as a powerful economic entity. Texas’ $2.4 trillion economy is the eighth largest in the world ahead of Canada, Italy and many more.

It also doesn’t hurt that Abbott has been a friend to institutional wealth. He’s been a proponent of amending the state constitution to bar financial transaction taxes in the future.

Though it won’t have a physical trading floor, the exchange will be headquartered and have executive offices in Dallas along with utilizing a Dallas data center. The region is home to approximately 150 data centers which produce 650 megawatts of power, according to Real Assets Adviser magazine.

The Texas Stock Exchange will still have a presence in downtown Dallas with a location which will serve as the physical front of the electronic exchange.

The exact location has not yet been announced, but it will be a venue where investors and traders will be able to visit to view the latest listing activities, Lee said.

“It will be where you project, quote, visibility and trade reporting,” he said. “There are a number of co-branding opportunities around our listings, and we will host regional and global conferences right here at the heart of the Texas ecosystem.”

Lee and the Texas Stock Exchange have already been in contact with some of Dallas’ biggest companies as well as others across the nation to get listed when it goes live, he said.

“It’s not just across the state. There are 1,522 public companies across the southeast region of the U.S. That’s really our primary market for what we’re doing,” he said. “Our approach is one that will create additional alignment between the listed and, whether it’s corporate, or sponsored, exchange-traded products.”

Another part of Lee and the Texas Stock Exchange’s pitch to get companies listed is to promise Texan, business-friendly stability in the wake of New York’s proposed financial transaction tax, he said.

“We’re really just responding to market demands. We’re a big believer in American capitalism and the power of competition in our capital markets,” he said. “That’s not to say that we are going outside the boundaries of existing standards. But we believe there’s a way that you can pick up additional private companies that are seeking to become public by adjusting some of the early stage criteria in growth.”

Lee knows it’s a bold move for Texas to start a stock exchange. It could dramatically reshape how and where people invest for years, but to him, that’s just business, he said.

“If we draw activity away from the [NYSE and NASDAQ], that’s just part of the competitive process,” he said. “This is a national securities exchange. If we’re fortunate enough to be approved by the SEC, we think we could focus what we’re doing initially in [the Southeast] to capture a portion of shares in those markets because of the alignment that we’re bringing forward.”

Lee and the Texas Stock Exchange still have a distance to go before it’s official. Though he’s been working on this for years, he has to file a registration with the SEC later this year to legally operate as a national securities exchange.

He feels confident that his group will help push Texas to become a richer economy with more investments and relocations coming to Dallas and the state, he said.

“There’s not a day that goes by without the suggestion to get into crypto, derivatives, or some other trading instrument,” he said. “Our purpose here is to take advantage of the unique set of attributes and environment that we have and stay focused to build critical mass and have tremendous operating leverage as they grow.”

“It’s an exciting time to be in Texas, and particular in Dallas.”

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