The New York Stock Exchange announced plans to introduce NYSE Texas, relocating its Chicago operations to Dallas, marking a shift in the exchange landscape that could create new opportunities for exchange-traded fund issuers and investors.
Texas has emerged as the state with the largest number of NYSE listings, representing more than $3.7 trillion in market value, according to the NYSE’s announcement. The move comes as the Texas Stock Exchange (TXSE) files for regulatory approval to operate as a national securities exchange, intensifying competition in the region.
While NYSE Texas represents a rebranding and relocation of NYSE’s existing Chicago operations to Dallas, TSXE is an entirely new exchange building its electronic trading platform from the ground up.
For the ETF industry, the addition of Texas-based exchanges could give fund companies more choices about where to list their products, potentially lowering costs. However, splitting trading across more venues raises questions about how easily investors can buy and sell ETFs.
The creation of new exchange venues in Texas comes as the ETF industry continues to expand, with issuers seeking differentiated ways to bring products to market. Both NYSE Texas and TXSE have indicated plans to attract ETF listings, potentially creating a more competitive environment for issuers.
The TXSE has raised $161 million in capital from major financial institutions, including BlackRock Inc. (BLK), Citadel Securities, and Charles Schwab (SCHW)—companies that play crucial roles in the ETF ecosystem as issuers and distribution platforms.
“In the ETF space, branding, marketing, and distribution are everything. The decision to list with NYSE Texas offers issuers—both established and new—a chance to tell their story and align their brand values with a location that resonates with today’s business climate,” said Springer Harris, chief operating officer of Teucrium ETFs.
While operational changes may be limited, the creation of NYSE Texas could affect ETF trading dynamics. Paul Schatz, president of Heritage Capital, said additional competition in the exchange space “will only help liquidity and spreads with more competition and unique competition.”
For ETF issuers considering listing venues, the emergence of NYSE Texas alongside TXSE could lead to reduced listing costs and enhanced market-making opportunities, according to Harris. However, the trading operations will likely remain centralized in Mahwah, New Jersey, maintaining the same infrastructure that ETF traders currently utilize.
