In the fall of 2022, the governor of Texas went to dinner in Houston with a half-dozen friends. Before the plates were cleared, Greg Abbott told his buddies around the table that there was something else he wanted to order -- and it wasn't on the menu.
He'd like the Lone Star state to have its own stock exchange. Sitting across from the governor, James Lee was just the man to build it.
Even for a state that takes pride in making everything outsized, the idea was a big one. When Nasdaq launched in the 1970s it took the exchange two decades to become competitive with the New York Stock Exchange.
This week, traders from Goldman Sachs and Citadel Securities, traded mock symbols in practice runs on the Texas Stock Exchange. On Friday, at 9:30 a.m., a handful of small stock symbols began trading and TXSE -- "tex-ee" as they say -- was up and running for real.
Stock trading has never been bigger. SpaceX's $86 billion initial public offering was just the largest ever, and AI titans OpenAI and Anthropic could go public in a matter of months. It's a gold rush, and Texas dreams of a land grab from the duopoly of the NYSE and Nasdaq.
Politicians have spent years laying the groundwork to elevate Texas in the business world, first by wooing companies to move their headquarters to the state, then by establishing their own business courts to take on Delaware's stronghold as the country's corporate capital. TXSE lined up financial backers including BlackRock, Goldman, Fortress Investment Group and Charles Schwab.
Today, more Fortune 500 companies are headquartered in the state than any other. SpaceX calls Texas home, and OpenAI is building massive data centers in the state.
Raised in Houston, Lee has a long career of starting Texas companies and a talent for pulling in funding. He co-founded a Houston-based electronic trading platform in the 1990s that he later sold to E*Trade. On the boards of arts and education organizations, the avid golfer also wingshoots, hunting birds with a shotgun while they are in flight.
TXSE doesn't yet have a single company listing. Lee's listing team has been out hustling to sign up big companies to make splashy switches from NYSE and Nasdaq to TXSE. He hired Liz Hocker from the New York Stock Exchange to lead the effort to win IPOs for TXSE. The state opened an office in London this year to encourage British businesses to expand to Texas.
Meanwhile, TXSE can trade companies listed elsewhere during the day. If the TXSE wants to woo big companies to list their shares on the exchange, it will need to prove it has ample liquidity -- or trading volume.
TXSE's pitch to companies is that affiliating with the state of Texas is the smart business play. Legislators and exchange officials tease that there could be more state laws in the works that benefit companies listed in Texas, and the exchange is also working to compete with the incumbent exchanges on listing costs.
"We will be a permanent, established part of the U.S. capital markets for all time," said Lee in an interview. "The proof is going to be in the movement of companies. You're going to see listings on this exchange like has never happened before."
Local stock exchanges used to be common in the U.S., providing a place for buyers and sellers of securities to gather to trade. The oldest in the U.S. was the Philadelphia Stock Exchange, established in 1790 at the Merchants Coffee House in Philadelphia. The New York Stock Exchange was founded in 1792, and then came many others, including the New Orleans Stock Exchange, the Spokane Stock Exchange and the Chicago Stock Exchange.
Over time, new technologies and regulations prompted smaller exchanges to combine or shutter. In the 1960s, trading volumes soared. The NYSE closed on Wednesdays to allow brokers to keep up with all the handwritten orders. The so-called "paperwork crisis" paved the way for Nasdaq's all-electronic stock exchange to debut in 1971.
Trading was forever changed. In the coming decades, the remaining local exchanges were mostly scooped up by NYSE or Nasdaq, with Nasdaq acquiring the Philadelphia Stock Exchange and the NYSE parent company buying the American Stock Exchange in the 2000s. Alternative trading platforms and smaller electronic exchanges remain as niche forums. The consolidation cemented the listing duopoly in the U.S.
In the 1960s, the Texas House of Representatives asked the University of Texas to study the feasibility of creating a Texas stock exchange. Nothing came of it.
In 2000, the state's new governor, Rick Perry, learned Boeing was considering moving its headquarters from Seattle to Chicago or Dallas. Perry wooed Boeing's then-CEO Phil Condit, but the aircraft manufacturer chose Chicago.
Perry asked his team to find out why. An adviser said one reason was the perception that Chicago's cultural arts exceeded anything in Dallas.
The blow helped define Perry's 14-year governorship, he said in an interview.
Perry was determined to send the message to companies across the country that Texas was business-friendly. The Texas legislature passed sweeping tort reform, which capped punitive damages and limited class-action lawsuits.
The Modern Art Museum of Fort Worth opened in a new building at the end of 2002. The AT&T Performing Arts Center opened in 2009. That same year, construction began to build the Perot Museum of Nature and Science in Dallas.
In 2011, Perry ran into Boeing's Condit at an event. He hadn't seen him since 2001, when he was pitching him on Dallas.
"I went over, introduced myself, we walked inside and I say, 'Where are you living now?'" Perry said. "He said, Frisco, Texas."
Condit remembers the exchange similarly.
Frisco is in the corridor north of Dallas and one of America's fastest-growing regions with stretches of new housing and office developments. Companies with headquarters elsewhere are building large offices in Dallas.
Aasem Khalil recalls walking into David Solomon's office at Goldman Sachs' Manhattan headquarters in 2016, excited about his next assignment. He knew he was heading to a new office, and he expected London or Hong Kong. Solomon, then-head of investment banking, told him he would be the head of investment banking in Dallas.
"I was stunned," said Khalil, a lifelong New Yorker who grew up on Long Island and had spent two decades at the bank's headquarters. He quickly fell in love with his new home.
Goldman had fewer than 900 employees in Dallas. Now, there are around 4,500. The firm is building a campus that will be home to more than 5,000 bankers and other personnel. Dallas is Goldman's second-largest office in the U.S. behind New York. Goldman Sachs is a key backer of TXSE.
JPMorgan employs more people in Texas than New York, and Dallas now ranks second to New York City among metro areas in terms of the number of workers employed in finance-related industries.
Gov. Abbott established the Texas Business Court in 2023 in an effort to lure major companies to incorporate in Texas by promising swift dispute resolution and business-friendly judges.
For more than a century, Delaware had been known as the corporate capital of the United States. But in recent years executives of public companies expressed frustration with the Delaware Court of Chancery, often following legal rulings that didn't go their way. Abbott figured he had a receptive audience.
One of Delaware's most famous critics is Elon Musk. Furious after the court struck down his multibillion-dollar pay package at Tesla in 2024, Musk moved the incorporation of Tesla and SpaceX to Texas. Coinbase and Dell Technologies followed suit. Exxon Mobil earlier this year announced it was moving its incorporation from New Jersey to Texas.
The idea of a Texas Stock Exchange got just the boost it needed after Nasdaq passed a rule requiring companies to disclose board-level diversity. (Nasdaq no longer has that rule). Some conservatives bristled -- and traders started talking in early 2024 about an "anti-woke" exchange in the works in Texas.
By June, Wall Street heavyweights BlackRock and Citadel Securities had signed on as backers and the Texas exchange had raised roughly $120 million. Lee has said the exchange is not political, just CEO-friendly.
Meanwhile, new laws in Texas were being written to help entice companies to list shares in the state. One raises the bar for shareholder proposals if a company is incorporated in Texas and its shares trade there or the company is headquartered in the state.
Partially in response to such new enticements, NYSE rebranded its electronic stock exchange NYSE Chicago into NYSE Texas in 2025 and reincorporated it to the state. It also hired Abbott's former senior staffer Bryan Daniel as president of NYSE Texas.
Nasdaq followed. Earlier this year, it rebranded its Nasdaq BX electronic exchange into Nasdaq Texas and reincorporated it to the state. SpaceX chose to dual list on Nasdaq and Nasdaq Texas in its blockbuster IPO.
Perry is on TXSE's board of directors. The board also includes a former SEC official.
The exchange is operating from temporary offices in Dallas's Uptown neighborhood. It plans to move into permanent headquarters in the Bank of America Tower when construction is completed next year. By the end of the month, all U.S.-listed stocks and funds are expected to trade on the exchange.
Only shares of small stocks may have changed hands, but as its new website says, "Welcome to the real bull market."
Write to Corrie Driebusch at corrie.driebusch@wsj.com
(END) Dow Jones Newswires
July 10, 2026 20:00 ET (00:00 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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