As the Texas Stock Exchange (TXSE) prepares to launch, we find ourselves at a pivotal moment for small businesses across the Lone Star State. This new financial frontier presents both challenges and opportunities that will reshape our economic landscape.
As accountants and financial advisors at Badger CPA, we recognize the profound impact this development will have across all sectors. The implications are far-reaching, from increased access to capital to heightened regulatory scrutiny. In this blog, we’ll explore the potential benefits and provide insights to help our clients plan for the rollout.
What is the Texas Stock Exchange?
A New Challenger in the Financial Arena
The Texas Stock Exchange, headquartered in Dallas, Texas, will be an electronic national securities exchange where national and global companies can access U.S. markets. TXSE aims to better align issuers and investors and address the high cost of going public and staying public. Over the past 25 years, publicly traded companies have declined by more than 40%, a driving factor in their decision to open markets. The new exchange will challenge the NASDAQ and the New York Stock Exchange (NYSE), positioning itself as a formidable alternative.
With Form 1 registration complete and $161 million in capital from investors, TXSE is on track for planned first trades in early 2026. This timeline allows businesses to prepare and consider how this new exchange might influence their financial strategies. As your trusted San Antonio accounting partners, we have the financial expertise and regulatory knowledge to guide companies through the complexities, ensuring a smooth and successful transition to the public market.
Rising Standards, Lowering Costs
One of the most intriguing aspects of the TXSE is its dual focus on elevating listing standards while reducing the costs associated with going public. This approach could address challenges small businesses often face when considering an Initial Public Offering (IPO) when a company sells shares of stock to the public for the first time. For many, the prospect of going public has seemed daunting due to traditional exchanges’ high costs and stringent requirements. The TXSE’s innovative approach could open new doors for growth and capital acquisition.
What’s in it For Texas Businesses?
How significant will the TXSE be for local businesses? It is a question we’re hearing more frequently from our clients. While it’s too early to provide a definitive answer, the potential benefits are worth considering. By providing a more accessible path to public trading, TXSE could offer several advantages:
- Increased visibility for Texas-based companies
- A streamlined path to more growth and expansion
- Potentially lower fees and more flexible listing requirements
- A stock exchange that understands the unique needs of Texas businesses
The best step business owners can take is to start thinking about how the exchange might fit into those plans. While change is inevitable, you don’t have to do this alone. Our team at Badger CPA can provide the guidance needed for the following:
Understanding Listing Requirements: Our CPAs are experts in financial reporting and compliance. As an extension of your team, we’ll help you understand the TXSE’s specific listing requirements so you meet the necessary criteria for going public.
Financial Due Diligence: We’ll help you prepare for any rigorous processes involved in the listing process, from identifying risks to providing accurate and transparent reporting.
Regulatory Compliance: The TXSE has new rules and regulations regarding compliance. Analyzing the risk of penalties or delisting requires a trained eye. Before going public, our team can tailor financial plans and forecasts and provide guided/informed decisions about capital allocation.
Ongoing Reporting and Compliance: Once a company is listed, ongoing financial reporting and compliance are essential. We’ll help you meet all obligations, providing accurate and timely financial information to investors.
While all industries will be somewhat impacted, the energy, technology, real estate and construction, and healthcare sectors will likely see the most impact and demand as the TXSE launches and grows.
- Energy & Technology: Energy, a cornerstone of the Texas economy, is expected to see increased listing activity for energy companies, requiring accounting expertise in revenue recognition and asset valuation, as well as regulatory compliance specific to oil and gas. Similarly, we’ll see a booming tech sector, particularly in Austin–where accurate financial reporting will be paramount while navigating the TXSE’s listing requirements.
- Real Estate & Construction: Beyond energy and tech, real estate and construction, significant drivers of the Texas economy, will require CPAs for financial planning, project accounting, and compliance with tangible estate-specific regulations as they gain access to capital through the TXSE.
- Healthcare: Texas’s growing population and developments will drive expansion in the healthcare industry. Healthcare companies often face complex regulatory environments and have unique accounting considerations related to revenue recognition, insurance, and research and development. CPAs will be essential in helping these companies maintain financial compliance.
Get Started with Badger CPA
As trusted advisors to Texas businesses, we recognize the importance of staying ahead of these changes. We encourage small business owners to consult with qualified CPAs and financial experts to proactively address the demands of the new exchange and position themselves to thrive in this new era of localized public trading.