- Key insight: Texas Capital Bancshares is opting to transfer its Texas-focused exchange-traded funds from the New York Stock Exchange to the newly launched Texas Stock Exchange.
- What's at stake: The move is another example of the Dallas-based bank's commitment to its home state, whose booming economy is a major driver behind the startup exchange.
- Forward look: The bank's ETFs are scheduled to begin trading on the Texas Stock Exchange in mid-September.
Texas Capital Bancshares in Dallas is taking another step to demonstrate its conviction that there's no better place to invest and do business than in its home state.
The regional bank plans to transfer its Texas-focused exchange-traded funds from the New York Stock Exchange to the newly launched Texas Stock Exchange next month. The two ETFs — TXS, which offers exposure to publicly traded companies headquartered in Texas, and OILT, which offers targeted exposure to publicly traded oil and gas producers with significant production activity in Texas — will be the first primary listings on the exchange and the first ones to transfer from another exchange.
The pending transfer is the latest example of Texas Capital's commitment to the Lone Star State. The $33.9 billion-asset bank plans to again
Now that the Texas Stock Exchange exists, it makes sense to move the bank's ETFs, according to Carlos Peña, the head of ETF and funds management at Texas Capital Bank.
"Texas Capital as a whole has been investing in Texas for years," Peña told American Banker. "So moving to the Texas Stock Exchange is just a natural extension of that commitment."
The startup exchange, which launched in early July, aims to compete with the New York Stock Exchange and Nasdaq, New York's powerhouse markets. The electronic, national securities market — the first one built, headquartered and incorporated in Texas, according to the exchange — is backed by investors such as BlackRock, Citadel Securities and Goldman Sachs.
The exchange's kickoff comes as the Texas economy continues to outshine other states and attract individuals as well as companies. Along with the lack of personal income taxes and the lack of corporate income taxes, the state has made certain reforms to position itself as a business-friendly haven, such as establishing the Texas Business Court, which specializes in business disputes and aims to reduce delays while providing consistency. Such changes are enticing some out-of-state companies to relocate their headquarters to Texas and, in the case of banks, open more branches in Texas or acquire Texas-based banks to gain access to the state.
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The increased interest in Texas is
The Texas Stock Exchange has been adding securities "tranche by tranche" since its launch, said Rob Marrocco, global head of exchange-traded products at the Texas Stock Exchange. In addition to Texas Capital's ETFs, the exchange will add other existing ETFs and new ETFs in coming weeks, Marrocco said. It plans to facilitate initial public offerings in 2027, he added.
The exchange is currently operating out of a temporary location in Dallas. It plans to move into a permanent location in the Bank of America Tower at Parkside in Dallas' Uptown district.
Texas Capital's two ETFs are scheduled to begin trading on the exchange on Sept. 16, one day after their final trading day on New York Stock Exchange Arca, the leading U.S. exchange for exchange-traded products. The move represents "absolute brand alignment," Marrocco said.
"It fits better with the narrative of those products," he said.
Both ETFs were launched in 2023 as Texas Capital was building its investment bank. The funds' existing investment objectives and strategies will remain unchanged, the bank said. As of Thursday, TXS had $38.2 million assets under management while OILT had $14.6 million, Peña said.
The move away from the New York Stock Exchange could mean "potential" cost savings for Texas Capital, according to Peña. He declined to give more details, saying that cost was not a motivating factor in the bank's decision to switch its ETFs. But the Texas Stock Exchange is generally expected to be a lower-cost alternative compared with the larger players.
The bank's stock is currently traded on Nasdaq and there are no plans to change that, Peña said. There are also no plans to move its third ETF, a government money market fund, away from the New York Stock Exchange, as it is not Texas-focused, he said.
