Texas Stock Exchange Swaps Delaware Law for Lone Star Bylaws
Published Date: 4/10/2026
Notice
Summary
The Texas Stock Exchange is updating its key legal documents to switch from Delaware to Texas rules, including its stockholders' agreement, formation certificates, bylaws, and company agreement. These changes affect TXSE Group Inc. and Texas Stock Exchange LLC, making their structure clearer and more Texas-friendly. The updates took effect immediately after filing on March 23, 2026, with no new fees or costs for stakeholders.
Analyzed Economic Effects
7 provisions identified: 1 benefits, 3 costs, 3 mixed.
3% Share Requirement to File Derivative Suits
If you are a shareholder of TXSE Group, you cannot start or keep a derivative lawsuit unless you hold at least 3% of the outstanding shares at the time the suit is filed when TXSE Group has any class of Common Stock listed on a national securities exchange or has 500 or more shareholders.
Lawsuits Moved to Texas Business Court
TXSE Group's governing documents make the Business Court in the First Business Court Division (and if that court lacks jurisdiction, the U.S. District Court for the Northern District of Texas, Dallas Division) the exclusive forum for many internal claims; shareholders are also identified as waiving the right to a jury trial for these actions, and Securities Act complaints are limited to federal district courts.
Proxy Validity Shortened to 11 Months
TXSE Group's bylaws will provide that a proxy is not valid after eleven (11) months from its date unless the proxy itself states a longer period, replacing the prior three (3) year period.
Meeting Notice, Share List, and Ballot Rule Changes
For shareholder meetings on a 'fundamental business transaction,' TXSE Group will require at least twenty-one (21) days' notice; the shareholder list used for voting will be prepared eleven (11) days before the meeting (not ten), and that list will show the type of shares and number of votes per shareholder; bylaws also change ballot and written-ballot language.
Reincorporation Effective Upon Filing; June 30, 2026 Deadline
The conversion of the Exchange and TXSE Group from Delaware entities to Texas entities became operative upon filing (the Exchange filed the proposal on March 23, 2026), and the Stockholders' Agreement defines 'Reincorporation Time' as the Effective Time (the Board-approved Plan of Conversion dated March 3, 2026) with a latest possible Reincorporation Time of June 30, 2026.
Certain Named Consent-Language Removed
The Stockholders' Agreement removes language in the consent rights of certain named parties (BlackRock, Citadel, Schwab, JPM, BofA, and Goldman) that related specifically to undertaking a change in corporate form or jurisdiction (i.e., the Delaware-to-Texas change).
No New Fees or Costs for Stakeholders
The Exchange stated that the updates became effective upon filing on March 23, 2026 and that there are no new fees or costs for stakeholders associated with these document changes.
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