Citadel and BlackRock jointly invest in the Texas Securities Exchange to seize the ETP market

According to a report by Reuters, the Texas Stock Exchange, TXSE, backed by BlackRock and Citadel Securities, will open a new national securities exchange in Dallas, the third-largest city in Texas, offering a fully electronic trading environment to attract more Exchange Traded Products (ETP) listings.

TXSE Emphasizes CEO-Friendly Approach, Targets ETP Market

Texas Stock Exchange (TXSE), established with a funding of $120 million from over 20 investors including BlackRock and Citadel Securities, plans to submit registration documents to the U.S. Securities and Exchange Commission (SEC) this year. The exchange aims to open a new national stock exchange in Dallas, the third-largest city in Texas, with a target launch in 2025 and an initial public offering in 2026.

The exchange aims to attract Exchange-Traded Products (ETPs) listings and challenge the increasing compliance costs of Nasdaq and the New York Stock Exchange.

According to The Wall Street Journal, the exchange positions itself as a "CEO-friendly" alternative to the NYSE and Nasdaq.

A Nasdaq rule requires listed companies to disclose diversity information about their boards. The SEC approved the plan in 2021 but now faces new challenges in federal appeals court.

Founded in 2023, the Texas Stock Exchange will focus on helping U.S. and global companies access the U.S. equity capital markets and provide trading and listing venues for listed companies and growing ETP products. TXSE will be an all-electronic national securities exchange and will seek SEC registration.

Citadel Also Backs EDX Cryptocurrency Exchange

In June 2023, Citadel, Fidelity, and Pershing-backed exchange EDX officially launched, offering cryptocurrency trading services to retail brokers.

It offers cryptocurrencies such as Bitcoin, Ether, Litecoin, and Bitcoin Cash, avoiding thousands of crypto tokens deemed securities by the U.S. SEC. Additionally, EDX is a non-custodial company that does not directly handle customer funds. It acts solely as a marketplace where people can buy and sell cryptocurrencies. Similar to the stock market, investors do not directly access the exchange but submit orders through brokers like Fidelity and Pershing.

EDX CEO Jamil Nazarali stated that the failure of FTX spurred demand for cryptocurrency exchanges that are not custodians of user funds and have no conflicts of interest.

In January of this year, EDX introduced the digital asset clearinghouse EDX Clearing and completed a Series B investment led by new investor Pantera Capital and founding investor Sequoia Capital.

Citadel Continues to Break Wall Street Barriers

Citadel Securities, a market maker headquartered in Chicago, U.S., disrupts the monopoly of large banks or financial institutions using its robust analysis and electronic trading systems. It employs high-frequency trading and advanced mathematical models to analyze markets and conduct automated trading. This technological reliance enables it to quickly adapt to market changes and identify trading opportunities in the fast-paced financial markets.

In March 2021, SEC Chairman Gary Gensler expressed concerns about Citadel's market dominance during a congressional hearing, questioning:

What does it mean when one company has 40% to 50% of the retail order flow? How does this affect capital formation in this country? In this situation, what does best execution mean?

This highlights Citadel Securities' influence on the market, and the firm continues to break barriers on Wall Street, with grander ambitions in the cryptocurrency field and trading arena.