It looks like that long-rumored Dallas stock exchange is finally becoming a reality.
A new stock exchange headquartered in Dallas will launch next year aimed at competing with New York City’s exchanges, whose rules and regulations some companies have found onerous.
TXSE Group Inc. is founded and operated by James Lee, who says the company has already raised $120 million for the project — the largest backers of which are BlackRock and Citadel Securities.
BlackRock is a surprising name to be investing in a major initiative in Texas. After all, BlackRock’s previous headlines have been about various Texas retirement funds divesting from BlackRock over the company’s leftwing “Environmental Social Governance (ESG)” investing policies and their hostility to the oil and gas industry. Indeed, BlackRock CEO Larry Fink was a poster boy for ESG, but seems to have had at least a partial change of heart over ESG, saying he’s “ashamed” to use the term anymore, instead being less hostile to fossil fuels and supporting a strategy of “transition investing” in decarbonization technologies. (Maybe getting their stock downgraded over ESG had something to do with that.) Stefan Padfield says “Fink has apparently simply replaced ESG with ‘conscious capitalism,’ which suggests nothing much has really changed given that ‘ESG is conscientious capitalism in practice.’ He also notes that BlackRock’s stock price has under-performed the S&P 500 over the last 12 months.
The last time we looked into Citadel Securities was because they had apparently been caught with their hands in the GameStop naked shorts cookie jar at the same time they were telling trading platform (and investment recipient) Robinhood to stop allowing retail customers to buy GameStop.
Back to TXSE:
The plan was first reported by the Wall Street Journal. TXSE Group intends to register with the Securities and Exchange Commission (SEC) later this year. It will operate virtually but also eventually establish a physical presence in Dallas.
“Changes in equities trading markets are driving more volume to exchanges and more choices for issuers and sponsors,” Lee said in a press release.
“TXSE will ultimately create more competition around quote activity, liquidity and transparency, resulting in more consistent and reliable markets that benefit investors, global issuers and liquidity providers alike.”
Lee added, “Texas and the other states in the southeast quadrant have become economic powerhouses. Combined with the demand we are seeing from investors and corporations for expanded alternatives to trade and list equities, this is an opportune time to build a major, national stock exchange in Texas.”
TXSE sees Nasdaq’s and NYSE’s approaches to compliance and non-financial regulations, such as diversity targets, as heavy-handed and onerous.
“BlackRock is proud to be a founding investor in the Texas Stock Exchange to increase liquidity and improve market efficiency for BlackRock’s clients and other investors in the U.S. capital markets,” BlackRock Vice Chairman Mark McCombe told The Texan in a statement.
“TXSE is well positioned to capitalize on the Texas economy and strength of the state’s business environment. We look forward to engaging with the other investors on the benefits of the TXSE’s unique value proposition.”
This follows other similarly aimed projects that BlackRock and others have partaken in over the last decade — a list that includes things like Members Exchange, RFQ Hub, and Luminex Trading. Given the state’s growth and regulatory posture, those backing this new project see a unique investment opportunity.
This states the obvious: Texas has a pro-business, pro-growth regulatory environment, while New York (city and state) has a hostile, anti-growth regulatory environment.
No points for guessing which political parties control which state.
Not mentioned, but a distinct possibility, is that many big business owners see the Trump kangaroo court conviction as a potential threat to themselves. If Democrats are willing to use a weaponized judiciary to go after their political enemies, the law be damned, then who might be next? A presence in New York, even only a listing on the New York stock exchange, may now be perceived as a much bigger potential liability than it was. With companies moving their physical presence from failing blue states like New York and California to Texas, it make a great deal of sense to do the same in as many legal venues as possible.
Tags: BlackRock, Citadel Securities, Dallas, Democrats, Environmental Social Governance (ESG), James Lee (TXSE), Larry Fink, Mark McCombe, New York Stock Exchange, SEC, Social Justice Warriors, Texas, TXSE
Pro: Divesting from NYC and moving financial services and trading to a low-tax pro-business state.
Con: Blackrock is involved.
As noted above, Blackrock’s involvement should be thoroughly investigated. Blackrock has had a huge part in the ESG/DEI insanity plaguing the North America. Buyer beware.
For centuries, New York City has been the financial and cultural capital of these United States.
The Federal Reserve Bank located there is the de facto HEAD of the Federal Reserve.
But recently, Texas has outperformed all other states in job creation. Texas is the epicenter of domestic oil and natural gas production. Texas has a favorable economic climate, which emphasizes parsimonious outlays for welfare spending.
Citadel fled Chicago’s high-crime, high-tax environment to relocate in Florida.
Drum roll: money seeks its highest use value and Texas/Florida offer better ROI than NYC or Chicago. I expect the financial center of gravity to shift south at the expense of heritage financial centers. This shift will be led by Citadel and other market-driven investment banks.
To NYC I offer this salutation: Drop Dead!
As a follow up to what Malthus said above, I would add the warning that the Nomenklatura will retaliate as they can and try to punish Texas.
Subotai Bahadur
[…] third-world dump. Gracias, Fidel, and The upside of being an enslaved Cuban doctor BattleSwarm: Texas Stock Exchange Takes Aim At NYSE, With Unlikely Partners Behind The Black: SpaceX successfully launches and lands Starship and Superheavy, Lunar samples […]
TXSE will greatly complicate algorithmic trading (AT) and high-frequency trading (HFT). There will have to be some kind of real time arbitrage with the New York markets, or else there will be a market failure.
“Con: Blackrock is involved.”
If they try DEI games in Texas, the State AG will yank Blackrock’s choke chain. Already have earlier.
“I would add the warning that the Nomenklatura will retaliate as they can and try to punish Texas.”
And this differs from what they are doing already, how? We are use to it. And used to overcoming those efforts.
Seawriter says, “If they try DEI games in Texas, the State AG will yank Blackrock’s choke chain. Already have earlier.”
Now. They would do that now. Would TX be the same in 10 years after becoming a global financial hub? Would it be the same in 5 years? The NYSE and Wall Street crowd have huge influence on national and global politics and the electorate already. I never underestimate the ability of these people to corrupt a system and especially politicians with money sufficiently to get their way, especially Blackrock. NYC and Chicago aren’t cesspits due to leftist panderers alone, their status as stock and commodities markets also plays a part in their politics. They are linked, and all Texans should consider this carefully.
Black Rock and Citadel, inter alia, have raise $120 million for the purpose of building a Texas-based data center that will function just like the NYSE. The local data center will provide the same quotes, at the same time as New York. There is no latency advantage for New York, and no requirement for arbitrageurs to reconcile the two data centers.
Texas is home to more Fortune 500 companies than any other state. If anything, New York will have to play catch-up with Dallas. I can foresee SEC quarterly reports being leaked after New York’s trading desk has closed so that the locals can operate with same day trading data.
I repeat my earlier offer to NYC: Drop dead.
“There will have to be some kind of real time arbitrage with the New York markets, or else there will be a market failure.”
Look out!! If TXSE offers a superior product at a lower price compared to NYSE, it is evidence of imperfect competition and therefore creates for TXSE a monopolistic competition advantage.
This will necessitate government intervention so as to level the playing field before Texas achieves unfair dominance over New York’s historical advantage.
The accursed Alexander Hamilton labored assiduously to establish a Central Bank in NYC. Andrew Jackson, in one of the few enlightened acts that characterized his administration, refused to renew the charter for Alexander Hamilton’s bastard child.
This resulted in One Hundred years of unprecedented economic expansion until these United States overtook England as the world’s primary economy almost immediately following WW I.
Being economically superior to every other country was evidently a Very Bad Thing because d/prog Woodrow Wilson set about canceling this advantage by establishing the Federal Reserve as the successor to Hamilton’s misbegotten monster.
Fast forward One Hundred Years and we are no longer the world’s unchallenged economic superpower. To the contrary, we are $Trillions in debt.
This is called Bad Luck/Market Failure because reasons.
Let the Fed’s head (NYC Federal Reserve Bank) die a quick death so that we may recover our economic freedom.
Note to NYC: drop dead.
[…] “A lot of Wall Street people are noticing that New York kinda sucks.” He fingers Miami as the next Wall Street, but I think Dallas also has a shot. […]