On September 30, 2025, the Securities and Exchange Commission (the “SEC”) formally approved the application of the Texas Stock Exchange (the “TXSE”) to operate as a national securities exchange, making it the first fully integrated national securities exchange, that supports listings, trading, market operations and other services on one platform, to receive SEC approval in decades. The TXSE plans to formally launch trading and listing activities in 2026 with the goal of reducing the burden of going and staying public. Unlike The Nasdaq Stock Market LLC (“Nasdaq”) and the New York Stock Exchange (the “NYSE”), which have multiple market tiers, the TXSE is a single-tier system designed to support mid- to large-cap issuers.
Companies applying for listing on the TXSE must complete a confidential pre-application process. If the TXSE determines that a company is eligible, it will provide a clearance letter that is valid for nine months from the date of issuance. If the company does not list within the nine-month period and wishes to list at a later time, it must go through the confidential pre-application process again. Similar to Nasdaq and the NYSE, companies applying to be listed on the TXSE must meet certain quantitative requirements. The TXSE allows companies to qualify for listing under one of two quantitative tests:
- Earnings Test: to meet the earnings test, a company must have generated aggregate pre-tax earnings from continuing operations, and after minority interest, amortization and equity in the earnings or losses of investees, subject to certain adjustments, of either (i) at least $10 million over the past three fiscal years with a minimum of $2 million in each of the two most recent years, and positive earnings in all three fiscal years; or (ii) $12 million over the past three fiscal years, with at least $5 million in the most recent fiscal year and $2 million in the second most recent fiscal year. Alternatively, companies that qualify as emerging growth companies may satisfy the earnings test with $10 million in aggregate pre-tax earnings from continuing operations and after minority interest, amortization and equity in the earnings or losses of investees, subject to certain adjustments, over the last two fiscal years, provided the company earned a minimum of $2 million in each fiscal year. This framework is similar to the NYSE’s earnings test and the Nasdaq Global Select Market’s earnings standard.
- Market Capitalization Test: to meet the global market capitalization test, a company must have a minimum market capitalization of $200 million. For current publicly-traded companies looking to list on the TXSE, the TXSE requires companies to meet a minimum market capitalization of $200 million and maintain a bid price of $4.00 per share for at least 90 consecutive trading days. These requirements are similar to the NYSE’s market capitalization test and Nasdaq’s market value test, both of which are commonly used by companies with active investor demand and limited earnings history.
Many of the initial listing requirements of the TXSE for initial public offerings closely mirror the requirements of Nasdaq and the NYSE. The chart below compares certain initial listing requirements of the TXSE to the Nasdaq Global Market (“Global Market”), Nasdaq Capital Market (“Capital Market”) and the NYSE for initial public offerings:
| Requirement | TXSE | Global Market | Capital Market | NYSE |
| Round Lot Holders | 400 | 400 | 300 | 400 |
| Publicly Held Shares | 1,100,000 | 1,100,000 | 1,000,000 | 1,100,000 |
| Bid Price | $4.00 | $4.00 | $4.00, subject to certain exceptions | $4.00 |
| Market Value of Unrestricted Publicly Held Shares | $40 million | $15, 18 or 20 million, depending on listing standard under a newly approved rule | $15 million, under a newly approved rule | $40 million |
| Market Makers | 3 or 4, depending on certain eligibility criteria | 3 or 4, depending on listing standard | 3 | N/A |
In addition, the TXSE’s continued listing rules closely align with Nasdaq and the NYSE’s rules as they relate to (i) events requiring notification to be sent to the exchange, (ii) notice of certain material information to investors, (iii) stockholder approval requirements, (iv) corporate governance, (v) potential delisting events, and (vi) trading hours. In its approval, the SEC acknowledged that many of the attributes of the TXSE’s listing rules are substantially similar to the pre-existing national securities exchange frameworks.
While the TXSE’s goal is to reduce the burden of going and remaining public, the quantitative tests and initial listing requirements of the TXSE make it more difficult for small- to micro-cap companies to qualify for listing. These stringent requirements appear to be best suited for mid- to large-cap companies. Small- and micro-cap companies that hoped the TXSE would offer new listing opportunities—since Nasdaq and the NYSE have made it harder to list and remain listed—will likely have to look elsewhere.
Next Steps
If you have any questions about applying for listing or the continued listing requirements of Nasdaq, the NYSE or the newly approved TXSE, please contact a member of Harter Secrest & Emery’s Securities and Capital Markets group.