How Would a Texas Stock Exchange Compete With NYSE and Nasdaq?

The race to establish “Y’all Street” as a legitimate competitor to the duopoly of the New York Stock Exchange (NYSE) and Nasdaq on Wall Street has kicked into high gear, with billions in potential listing fees at stake. NYSE Texas opened in Dallas in March 2025, securing Trump Media and Technology Group Corp. (DJT) as its first listing, while the Texas Stock Exchange (TXSE) has secured $161 million in backing from giants like BlackRock, Inc. (BLK) for a 2026 launch.

“Texas’s $2.7 trillion economy is very large (second in the U.S., eighth in the world) and rapidly-growing (fastest-growing large state in the U.S.),” Bülent Temel, professor of economics at the University of Texas at San Antonio, noted to Investopedia. “It means more and more companies are growing to reach the scale to go public to accelerate their growth. Getting listed and traded in a local Texas exchange would likely be these companies’ first choice as it is good PR for them in a state’s common culture that rewards localness.”

The Rise of “Y’all Street”

Regional exchanges once operated across America, but by the late 20th century, regulatory changes and technological advances had solidified the NYSE-Nasdaq duopoly, with the last of the five regional exchanges swept away by consolidation from 2006 to 2009.

Attempts by others to carve out market share by focusing on high-frequency trading (HFT) largely went nowhere in the 2010s. Backers of the TXSE say this time is different. The state has drawn in hundreds of major companies with its low taxes, looser regulations, and thriving economy, including high-profile relocations by Tesla (TSLA), Oracle Corp. (ORCL), and Chevron Corporation (CVX).

Adding to all this, traditional exchanges face fierce competition from alternative trading systems. According to CBOE data, off-exchange trading venues now account for 51% of U.S. equities volume, compared with 18% for NYSE and 14% for Nasdaq—an increase of about 20% since 2020. This shift largely stems from the rise of dark pools, payment-for-order-flow arrangements, and trade matching among large institutional investors.

In January 2025, TXSE filed its 4,000-page Form 1 registration with the U.S. Securities and Exchange Commission, officially beginning the regulatory approval process with $161 million in capital. The exchange plans to launch its trading operations in early 2026, with listings becoming available by the end of that year.

The NYSE, recognizing the growing threat, relocated its Chicago operations to avoid the lengthy process of developing a new exchange from scratch, opening NYSE Texas in Dallas in March 2025, giving it the coveted first-mover advantage in the state.

Despite regulations for securities being national and trading that’s done electronically, Temel said being a local matters. “Arguably more so than other U.S. states, Texas has a common culture that is proud of its differences … and its business acumen,” he said. “This social psychology will likely pave the way for increasing numbers of Texans to invest in stocks using their local exchanges. Coupled with the fact that the average discretionary income has been rising in Texas, these cultural dynamics signal a bright future for the new exchanges in Dallas.”

TXSE vs. NYSE Texas

NYSE Texas hit the ground running with established regulatory approvals and infrastructure as part of Intercontinental Exchange Inc. (ICE), giving it immediate global recognition and existing relationships with listed companies.

TXSE, while backed by major players like BlackRock and Citadel, must build from scratch—a challenge that its backers frame as an opportunity to implement more efficient systems without legacy constraints.

Perhaps most striking is their divergent approach to listing standards. NYSE Texas follows its parent company’s established criteria, while TXSE said it’s going to institute significantly stricter requirements, with TXSE CEO James Lee saying these standards would exclude about 1,700 companies currently listed on NYSE and Nasdaq, a bold strategy that prioritizes quality over quantity.

The Bottom Line

TXSE represents the most serious challenge to the NYSE/Nasdaq duopoly in decades. Its unprecedented financial backing, Texas’s growing economic clout, and the increasing fragmentation of equity markets provide advantages earlier challengers lacked.

“There is an unsatisfied demand for stock trading, if not a need per se for local exchanges in Texas,” Temel said. “Distinct features of Texas … create opportunities for many private companies to go public, many public ones to also trade their stocks in Texas, and many more citizens and institutional investors to invest in Texas’s exchanges.”