Texas Stock Exchange Ditches Delaware for Home-State Legal Overhaul
Published Date: 4/10/2026
Notice
Summary
The Texas Stock Exchange is updating its official paperwork to switch from Delaware to Texas rules, including new formation certificates, bylaws, and stockholder agreements. This affects TXSE Group Inc. and Texas Stock Exchange LLC, making their legal setup cleaner and more Texas-friendly. These changes took effect immediately on filing, with no new fees or costs for stakeholders.
Analyzed Economic Effects
9 provisions identified: 1 benefits, 3 costs, 5 mixed.
Higher Derivative-Suit Threshold
TXSE Group elects to be governed by Texas Business Organizations Code Section 21.419 so that, when any class of Common Stock is listed on a national exchange or TXSE Group has 500 or more shareholders, no shareholder may start a derivative lawsuit unless the shareholder holds at least 3% of the outstanding shares. The 3% ownership requirement applies at the time the derivative proceeding is instituted.
Lawsuit Forum Shift to Texas Courts
The Group Certificate of Formation designates the Business Court in the First Business Court Division (or if that court lacks jurisdiction, the U.S. District Court for the Northern District of Texas, Dallas Division) as the exclusive forum for specified internal-entity claims, and adds that federal district courts shall be the exclusive forum for complaints under the Securities Act of 1933. A new subsection also identifies shareholders' waiver of the right to a jury trial.
Texas Rules for Meetings, Proxies, Voting
TXSE Group's documents adopt Texas law procedures: notice for a shareholder meeting about a "fundamental business transaction" must be given at least twenty-one (21) days before the meeting; the shareholder list used for meetings will be prepared eleven (11) days in advance; proxies generally are not valid after eleven (11) months unless the proxy says otherwise (replacing a prior three-year rule); and ballots/election procedures are updated to align with Texas law.
Removal of Certain Investors' Consent Rights
The Stockholders' Agreement removes language giving BlackRock, Citadel, Schwab, JPM, BofA, and Goldman consent rights specifically with respect to undertaking a change in corporate form or jurisdiction. Those consent-right language items will be deleted from the listed sections.
New Indemnification Advance Conditions
Under the new corporate documents, the corporation will advance legal expenses to covered persons only after they deliver written affirmation of their good faith belief that they meet Texas Business Organizations Code standards for indemnification, and advanced amounts must be repaid if it is later determined the person did not meet those standards.
Single-Class Voting for Fundamental Actions
The Group Certificate of Formation clarifies that, except as otherwise required by the Certificate of Formation, all classes or series of stock are entitled to vote as a single class for approving any matter, including 'fundamental actions' or 'fundamental business transactions,' and such approvals require the affirmative vote of a majority of voting power of all outstanding shares voting together as a single class.
Delaware-to-Texas Reincorporation
TXSE Group Inc. and Texas Stock Exchange LLC will convert from Delaware entities to Texas entities. All rights, privileges, powers, property, and liabilities of the Delaware entities vest in the new Texas entities upon the filing that effects the conversion.
Operative Upon Filing Immediately
The Exchange filed the proposed changes on March 23, 2026, and the Commission waived the normal 30-day operative delay and designated the proposal operative upon filing. That means the Exchange's conversion-related documents became effective immediately upon filing.
Reincorporation Deadline: June 30, 2026
The Stockholders' Agreement defines "Reincorporation Time" as the Effective Time of the Plan of Conversion approved March 3, 2026, and states that the Reincorporation Time shall be no later than June 30, 2026. The Agreement becomes effective at that Reincorporation Time.
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