- with readers working within the Insurance industries
The U.S. Securities and Exchange Commission's recent approval of the Texas Stock Exchange LLC (TXSE or the Exchange) as the newest national securities exchange marks a significant development in the U.S. capital markets.1 Headquartered in Dallas and backed by major institutional investors, TXSE aims to offer an issuer-friendly listing process while maintaining some of the highest quantitative standards in the industry.2 Trading and listings are expected to begin in 2026.3
For Canadian issuers, TXSE introduces a new pathway to the U.S. capital markets. This article explores what makes TXSE unique and why Canadian issuers should start planning now.
Key Features of TXSE
Unlike traditional exchanges, which offer lower tiers for smaller issuers, TXSE will operate as a single-tier exchange and require a confidential pre-application review before formal listing, allowing companies to assess readiness without public disclosure – available at no cost.4 TXSE has also collaborated with state leaders to create a pro-business environment, aimed at reducing regulatory friction and enhancing predictability for issuers.5
Why This Matters for Canadian Issuers
1. Cost Efficiency Compared to Other Exchanges
TXSE has committed to a competitive fee structure for going and staying public, coupled with a streamlined listing process.6
2. Dual-Listing Opportunities
Canadian issuers can maintain their TSX or TSXV listing while adding TXSE to broaden their investor base and access U.S. capital markets.
3. Sector Alignment
TXSE's Texas base positions it as a natural fit for energy, infrastructure, and industrial issuers, sectors where Canadian companies excel.
4. Issuer-Friendly Corporate Laws
Texas has adopted provisions designed to create the nation's "most pro-business environment."7 These reforms reduce litigation risk, limit shareholder activism, strengthen director protections, streamline governance, and provide tax clarity. A proposed constitutional amendment would also ban financial transaction taxes, creating a predictable, low-cost environment for public companies and market infrastructure.8
Initial Listing Standards
A. Domestic Issuers
Domestic issuers may qualify under one of two quantitative tests:9
1. Earnings Test
$10-12M in aggregate pre-tax earnings over three years, with minimum thresholds in recent years; or
2. Global Market Capitalization Test
Minimum $200M market value, with a bid price of $4.00 per share for 90 consecutive trading days.
Additional requirements include four Market Makers (unless the company meets certain income, equity, and market value requirements),10 and distribution criteria of 400 round-lot shareholders, 1.1M publicly held shares, and $40M public float.11 These thresholds broadly align with NYSE and Nasdaq's upper tiers, but notably exceed Nasdaq's lower-tier Capital Market.12
B. Quantitative Standards for Foreign Private Issuers (FPIs)
FPIs may qualify under the above domestic criteria, or TXSE's alternative listing standards,13 which mirror NYSE requirements for FPIs.14 Under the alternative standard, FPIs must maintain a broad, liquid market in their home country,15 and satisfy one of the following financial tests:16
1. Earnings Test
$100M aggregate pre-tax earnings over three years, with a minimum of $25M in each of the two most recent years.
2. Valuation / Revenue Test
Option 1: $500M in global market capitalization, $100M revenue in the most recent 12-month period, and $100M aggregate cash flow over three years, or
Option 2: $750M in global market capitalization with $75M revenue in the most recent year.
3. Affiliated Company Test
$500M global market cap with minimum 12-month operating history, and the parent or affiliate must be in good standing and retain control or be under common control of the entity.
In addition, FPIs must have four Market Makers (unless the company meets certain income, equity, and market value requirements),17 and meet the distribution criteria of: 5,000 round-lot shareholders, 2.5M publicly held shares, and market value of $100M ($60M for companies under the Affiliated Company Test).18
Key Considerations for Canadian Issuers
TXSE offers Canadian companies an alternative to traditional U.S. exchanges, but its listing standards are rigorous. As a single-tier exchange, TXSE's quantitative thresholds align with the upper tier of other U.S. exchanges and, unlike NYSE or Nasdaq, does not offer lower tiers for smaller issuers. Eligibility will depend on meeting these criteria, so early-stage issuers may need to scale before qualifying.
Cross-border compliance is another key consideration; companies must adhere to U.S. federal securities laws and Canadian regulations, including disclosure obligations under the Multi-Jurisdictional Disclosure System (MJDS) where applicable. With TXSE expected to launch in late 2026, early engagement through the confidential pre-application process is recommended.
Next Steps
TXSE combines familiar financial tests and governance provisions while introducing unique elements like mandatory pre-application review and high, single-tier quantitative thresholds. Issuers should start by reviewing size, governance structure, and reporting capabilities against TXSE's standards, and compare scenarios such as dual-listing on TXSE versus NYSE, Nasdaq or over-the-counter alternatives. Early engagement can help position companies ahead of the exchange's launch.
Footnotes
1. In the Matter of the Application of Texas Stock Exchange LLC for Registration as a National Securities Exchange; Findings, Opinion, and Order of the Commission, Release No. 34-104146, File No. 10-249 (Sept. 30, 2025), online: https://www.sec.gov/files/rules/other/2025/34-104146.pdf.
2. TXSE, "TXSE Group Inc announces SEC approval of Texas Stock Exchange" (Sept. 30, 2025), online: https://www.txse.com/press-releases/txse-group-inc-announces-sec-approval-of-texas-stock-exchange.
3. Ibid.
4. TXSE Rule 16.201(a).
5. TXSE, "Texas Stock Exchange" Fact sheet on TXSE" (Sept. 30, 2025) ["TXSE Fact Sheet"], online: https://www.txse.com/resources/txse-fact-sheet.
6. TXSE Fact Sheet, supra note 5.
7. Ibid.
8. Ibid; Texas Legislature, Senate Bill 2411, 89th Leg., Reg. Sess. (2025), online: Texas Legislature.
9. TXSE Rule 16.310(c)
10. TXSE Rule 16.310(d).
11. TXSE Rule 16.310(a).
12. NYSE Listed Company Manual § 102.01; Nasdaq Rules 5405, and 5505.
13. TXSE Rules Rule 16.312(a)(2)
14. NYSE Rule 103.01.
15. TXSE Rule 16.312(a)(8).
16. TXSE Rule 16.312(b)(2).
17. TXSE Rule 16.312(c).
18. TXSE Rule 16.312(b)(1).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
