A new bull is entering the ring — and it’s backed by heavyweights.

The newly-formed TXSE Group announced Wednesday that it’s planning to launch a Texas Stock Exchange, with $120 million in capital backing from more than two dozen investors, including asset management and liquidity giants BlackRock and Citadel Securities. The group plans to file for registration with the Securities and Exchange Commission later this year.

This makes it “the most well-capitalized exchange entrant” to file a registration with the regulator, the group said.

The bourse is seizing on “Texas’s booming economy and the strong economic and population growth among states in the southeast quadrant of the U.S.,” James Lee, TXSE Group chief executive, said in a LinkedIn post. The exchange plans to start enabling trades in 2025 and host its first listing in 2026, Lee told The Wall Street Journal, which earlier reported the news.

“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 said in a statement.

Backers of the exchange have promised that the TXSE will be more amenable to CEOs, who have been grappling with stricter regulations and higher compliance costs at other exchanges, including the Nasdaq and New York Stock Exchange, the Journal reported.

The exchange will be national, but will have a particular focus on serving the “southeast quadrant,” which the group defines as Texas, Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, and Tennessee.

Although it will be fully electronic, the exchange will be headquartered in Dallas, a city that has become a considerable business hub, especially in the financial services world.

Wall Street’s southward migration

Texas has seen an influx of businesses in the last several years, including the growing presence of financial services giants like Goldman Sachs, JPMorgan Chase, and Charles Schwab, the latter of which moved its headquarters to Dallas in 2021.

More than 25,000 businesses relocated to Texas from other states between 2010 and 2019, according to data from the Federal Reserve Bank of Dallas, lured in by the lack of income taxes and a more business-friendly climate. It was also the fastest-growing state in terms of population in the country in 2022, adding nearly half a million new inhabitants, the U.S. Census Bureau found.

The state is home to more Fortune 500 companies than any other state and more than 5,200 private equity-sponsored companies, the TXSE noted in a statement.

“Texas and the other states in the southeast quadrant have become economic powerhouses,” TXSE’s Lee said. “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.”