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TXSE sees ETFs as growth area

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Move highlights growing competition among exchanges

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TXSE hopes to begin operations in early 2026

By Suzanne McGee

March 13 (Reuters) - The Texas Stock Exchange (TSXE),

still months away from winning regulatory approval to begin

operations, said it hired senior exchange-traded funds

executives from Cboe Global Markets ( CBOE ) and Nasdaq to win a share of

trading in the $11 trillion U.S. ETF market.

It announced on Thursday that Robert Marrocco, formerly

global head of ETP, or exchange-traded products, listings at

Cboe Global Markets ( CBOE ), will take on the same role at TXSE

and Alison Hennessy, the former head of ETP listings at Nasdaq

, will become managing director of exchange traded

products.

The hirings signal the Texas exchange views the ETF arena

as key to its future growth, analysts said.

"The fact that they are poaching top talent from two of the

three biggest exchanges sends a clear signal that they are to be

taken seriously" as a future competitor in the ETF sector, said

Bryan Armour, ETF strategist at Morningstar.

The TXSE, which has disclosed that it has raised about $161

million in capital from some four dozen investors that include

financial giants BlackRock ( BLK ), Citadel Securities and

Charles Schwab ( SCHW ), filed paperwork in late January seeking

regulatory approval to operate a national securities exchange.

It hopes to win approval later this year and to begin listing

and trading in early 2026.

The hirings not only bolster the TXSE's roster but also may

end up creating challenges for the incumbent exchanges, said one

market structure analyst, who asked not to be named because his

firm does not permit him to comment publicly. In a rapidly

growing area such as ETFs, losing top executives to a potential

rival is "less than ideal," the analyst said.

"Together, these leaders managed more than 40% of all

(exchange-traded products) in the United States," the Texas

exchange said in a press release.

A spokesperson for Nasdaq declined comment on Hennessy's

departure.

"We wish them well in their future endeavors," Cboe said in

an statement, referring to Marrocco and two other Cboe staffers

that TXSE also hired.

In its press release, TXSE said that under Marrocco's

leadership since 2020, Cboe captured nearly 30% of all new ETP

listings.

Marrocco did not respond to requests for comment and a TXSE

spokesperson said neither he nor Hennessy were available to

discuss their new roles. In a post on LinkedIn, he described

TXSE as being "the next chapter of U.S. capital markets."

Marrocco's hiring "indicates that TXSE could prioritize ETP

listing, which is a relatively less competitive avenue compared

to individual stock listing," said Owen Lau, a senior analyst at

Oppenheimer & Co.

The three exchanges that dominate the U.S. stock and ETF

trading market have already responded to the TXSE's moves to

establish itself as a competitive force. Last month, the New

York Stock Exchange announced plans to open its own NYSE Texas

division.