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Industry firms have begun joining the exchange as members, including Dallas-based broker-dealer CAPIS.
“You might find this hard to believe, but I think James Lee is downplaying the seismic shift that is underway,” commented David Choate, executive director of sales and trading and chief operating officer at CAPIS.
Choate said the exchange is emerging alongside broader developments in Texas that he believes could make the state more attractive to companies.
He pointed to the state’s reputation as a business-friendly environment and noted that Texas has attracted several additional Fortune 500 companies in recent years.
Choate also cited Texas capital formation legislation and corporate law reforms, along with a constitutional amendment intended to eliminate the possibility of a financial transactions tax in the state.
“Together, these create the foundation for an extremely attractive alternative to the current listing options,” he said.
Choate acknowledged that established exchanges have longstanding positions in the market. “Status quo and the resistance to change are difficult foes,” he said. “These may take years to overcome.”
Still, he said he believes additional competition in listings could emerge over time.
“There is no reason to believe that New York will be able to maintain their monopoly over public listings, especially when a business-friendly environment, such as Texas, is offering a more attractive alternative,” Choate said.
“TXSE has the chance to materially change the model. And I expect them to be successful,” he concluded.