A stock exchange race broke out in Texas last year, with new and old institutions setting up shop to take advantage of the state’s business-friendly environment.
In July, the Texas Stock Exchange (TXSE) launched in Dallas to compete with the New York Stock Exchange (NYSE) and the Nasdaq, both of which set down their own exchanges in the state.
Now, San Antonio-based financial companies are listing their stocks on those markets to stay close to home and Texas’ growing financial industry, also known as Y’all Street.
“Once you have a chance to be a part of the Texas Stock Exchange, to be part of Y’all Street … Why wouldn’t we do that?” said Bill Day, corporate communications manager at Frost Bank.
Frost Bank, the 158-year-old San Antonio-based institution, will move from NYSE to TXSE on Thursday.
Victory Capital Management relocated to San Antonio in 2019 and manages around $355 billion worth of assets. The firm started dual-listing its stock on Nasdaq’s New York and Texas exchanges at the end of October.
Representatives from both companies said the Lone Star shift brings them closer to their locally based services, investors and personnel of these stock exchanges. But they also said it’s a commitment to Texas and its economy.
“If Nasdaq had opened a secondary exchange in Idaho, nothing against Idaho, that would be less of a relevant dual-listing for us,” said Mannik Dhillon, President of Investment Franchises and Solutions and Head of Exchange-Traded Funds at Victory Capital. “But given the fact that they and others are trying to make Texas a financial hub, and we are headquartered here in San Antonio, [this] made a lot of sense.”
Day and Dhillon both said their company’s moves would have little impact on investors, shareholders and their operations.
Victory Capital has listed its stock with Nasdaq in New York since 2018, Dhillon said. In March, Nasdaq launched its Texas branch with a ceremony at the Alamo, allowing companies to dual-list stock in New York and Dallas. That process has been seamless, Dhillon said, and gives investors more options.
Now, more investors can buy Victory’s stock offerings because Nasdaq’s Texas-based and New York-based exchanges have different pools of money and different markets. Victory Capital has dual-listed on other exchanges before, with little effect.
Dhillon said there would be a greater impact from moving to a whole new stock exchange, where different buyers might have different pools of liquidity or money.
“I would be more concerned about price differences had we moved to a standalone other exchange, because then you have to make sure that the liquidity providers are showing up to make markets,” he said.
That’s what Frost Bank is doing — moving from NYSE to TXSE — but Day said Frost Bank would not be affected.
“The average shareholder won’t notice a difference at all,” Day said.
Stock trading has become increasingly virtual, he added. Gone are the days when trading required an in-person presence on the floor of Wall Street exchanges.
“Investors shouldn’t notice any difference in their ability to trade, and anyone interested in [Cullen/Frost] shares will be able to find them through the same methods they used before the transition,” Day said.
He was confident that the market, and therefore the prices and demand for Frost Bank’s shares, would stay the same. TXSE launched more than a year ago; Frost Bank gave the exchange time to mature and show stability.
“It really is a gesture on our part to be recognized as a solidly Texas company with a commitment to the state and a commitment to the financial services industry in Texas,” Day said.
This story first appeared in the San Antonio Report.
