Famous for its low taxes, relaxed regulation, and killer BBQ, America’s next financial centre might just be Texas.
Driving the news: The New York Stock Exchange (NYSE) is launching a new equities exchange in Texas to challenge the recently announced Texas Stock Exchange (TXSE), which is backed by major Wall Street players like BlackRock and Citadel Securities.
Why it’s happening: The TXSE is looking to capitalize on disaffection with the high compliance costs and stricter ESG rules for firms listing on the Nasdaq and NYSE. Its financial backers are pitching the exchange as a more CEO-friendly environment.
Why it matters: There are more Texas-based companies listed on the NYSE than any other state, representing US$3.7 trillion in total market cap. As the Lone Star State keeps pushing its pro-business agenda, its status as a global finance hub is expected to grow even more.
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Over 300 firms have moved their headquarters to Texas in the past decade, including big names like Tesla, Oracle, Toyota, and Chevron.
- And the finance bros are following. The Dallas area is now home to more financial workers than any city in the U.S. except for New York.
Yes, but: Regardless of where a stock exchange is located, many companies in the U.S. have been avoiding going public to dodge the risks of public scrutiny, activist investors, and market swings. Since 1990, the number of public companies has fallen by over 50%.—LA