TheCorporateCounsel.net

On April 4, the SEC posted this Notice of Filing of Application, as Amended, for Registration as a National Securities Exchange by Texas Stock Exchange LLC, which application was initially filed on January 31 and amended on April 2. TXSE’s press release says it is the first fully integrated exchange to seek registration in 25 years! A Troutman alert notes this historic application “comes against the backdrop of an assertive campaign by the state of Texas to position itself as a rival to both New York and Delaware as the financial and corporate home for publicly traded companies.”

The alert also takes a close look at the application to better understand how the exchange plans to operate since the application includes its proposed listing rules. Securities practitioners will be happy to know that the rules will look familiar — there are many similarities to Nasday’s listing rules. In fact, the alert says, “the TXSE’s proposed corporate governance and shareholder approval rules appear to be based, virtually verbatim in certain instances, on Nasdaq’s rules, including the latter’s recent tightening of rules relating to reverse stock splits.”

With respect to initial listing criteria, however, TXSE aligns more closely with NYSE and has no tiers. And, in a move that might make it less palatable to small- and micro-cap companies, its proposed initial and continued listing requirements are more stringent than the Nasdaq Capital Market. The Troutman team prepared this helpful comparison of the TXSE’s proposed initial listing criteria with those of NYSE and the Nasdaq Capital, Global and Global Select Markets.

But that’s not all! The alert also points out that both NYSE and Nasdaq have “announced the creation of Texas-located markets or offices, with the NYSE moving one of its electronic exchanges to the state and Nasdaq opening a new regional headquarters in Dallas.” Move over, New York, there’s a new sheriff in town.

– Meredith Ervine