Max Bocken
Associate Editor
Loyola University Chicago School of Law, JD 2027
With its low tax burden on businesses, no state income tax, a large and diverse economy, and a strong work force, Texas has hosted an exceptionally business friendly environment for decades. The state is home to over 50 Fortune 500 companies (the most in the United States), has the 8th largest economy in the world and the second largest in the United States, and has one of the fastest growing populations. In recent years, Texas has been making its case as the most business friendly environment in the United States.
Business friendly actions taken by the Texas government
In 2024, the state established a new court system which focuses predominantly on corporate matters, an adoption aiming to compete with the prowess of the Delaware Court of Chancery. The Delaware Chancery Court is the most respected court on issues regarding corporate matters, and the level certainty and expertise offered by the court is a large reason why many companies look to incorporate in Delaware. Additionally, just this year Texas Governor Greg Abbott signed into law Senate Bill 29 and Senate Bill 1057, which makes it harder for shareholders to bring forth actions against their corporation and its board of directors, and for stockholders of public companies to bring forth shareholder proposals. These measures, combined with the state’s already business-friendly environment, have prompted several major corporations – such as Tesla, Charles Swabb, Oracle, and Chevron – to reincorporate in Texas in recent years. Most recently, on September 30th, 2025, the Texas Stock Exchange received approval from the SEC to operate as a national stock exchange. The measures taken by the government of Texas, and the actions taken by companies in response, have cultivated an attractive business environment and have potentially made Texas the most business friendly state in America.
The Texas Stock Exchange
Headquartered in Dallas, Texas, the Texas Stock Exchange (TXSE) will be a national stock exchange, similar to the New York Stock Exchange (NYSE), which will connect bids from buyers and asking prices from sellers in order to facilitate transactions. Its goals are to improve the relationship between issuers and investors and to address the high costs associated with companies going and staying public. TXSE Group, the parent company of TXSE, believes achieving these goals will help reverse the trend of companies choosing to stay, or deciding to go, private. TXSE looks to compete with the current duopoly held by the NYSE and Nasdaq by offering lower listing and transaction fees, more stringent registration requirements, and by allowing dual listing on their exchange, which will allow a company to list its shares on TXSE as well as other exchanges. Allowing dual listing offers greater liquidity to the market space and extends trading hours due to the varying time zones. In addition, lower listing and transaction fees will make it more available for companies to be listed, and stay listed, on the exchange.
Strict registration requirements ensure that the exchange will only allow companies of a certain quality to be listed. In fact, TXSE CEO, James Lee, stated that roughly 1,700 companies currently listed on the NYSE and Nasdaq would not be eligible for listing on TXSE. In order for a company’s stock to be registered on TXSE the security must be registered with the SEC and TXSE must conduct a pre-application eligibility review. Once it has been determined that the security has met its eligibility requirements, the company will be allowed to apply to list its security on TXSE. If their application is accepted, the company will then be allowed to submit an original listing application which, once approved, will allow the company to list its stock on TXSE. TXSE Group plans to launch TXSE in the first quarter of 2026.
The benefits for Texas and the uncertainty of TXSE
TXSE represents the most well-capitalized equities exchange to ever be approved by the SEC, with more than $250 million raised by investors. These investors include some of the largest financial institutions and liquidity providers in the world, such as J.P. Morgan, BlackRock, Charles Schwab, and Citadel Securities, as well as prominent business leaders.
TXSE’s path to success will not be without challenges. Like any stock exchange, TXSE’s success will depend heavily on transaction volume and since the NYSE, Nasdaq, and off-exchange traders – institutions and traders executing transactions with one another rather than through an exchange – control roughly 83% of the trading volume, establishing a foothold in the market may prove difficult. Furthermore, TXSE must compete with NYSE Texas, and potentially Nasdaq, as they announced plans to establish a regional headquarters in Dallas.
TXSE faces the unique challenge of building an exchange entirely from scratch – a hurdle not shared by competitors moving to the market. However, building an exchange from scratch also presents an opportunity to implement a more efficient system, correcting issues and growing pains commonly expressed by traders and institutions alike. Additionally, no other exchange which has attempted to compete with Nasdaq and NYSE have received the financial and institutional support that TXSE has. However, only time will tell if the exchange can succeed.
Regardless of TXSE’s success, its approval by the SEC has led to the two largest stock exchanges establishing a regional headquarters in the state. Nasdaq and NYSE are relocating in Texas, thanks at least in part to the legislative enactmentswhich now give favorable tax treatment to stock exchanges and stock transactions. These enactments add to the laundry list of initiatives taken by the state of Texas to further bolster its economy and business friendly environment. The presence of stock exchanges in the region will provide a platform for businesses to raise capital more easily and provides another reason for companies to locate their offices to the Lone Star State.