SEC chairman returns ”first principles’ to public markets, supports Texas exchange

By Bethany Blankley
The Center Square

At a Texas Stock Exchange roundtable in Miami, Securities and Exchange Commission Chairman Paul Atkins outlined his plan to return “first principles” to public markets. He believes this will also help Boom Belt states continue to drive the economy and more businesses to join the new Texas Stock Exchange (TXSE).

The TXSE hosted a roundtable in Miami at which Texas Gov. Greg Abbott, Florida Gov. Ron DeSantis, Citadel Securities President Jim Esposito and Texas Stock Exchange Founder & CEO Jim Lee spoke.

Abbott for years has led the effort for Texas to have its own stock exchange. The TXSE, based in Dallas, is the only national securities exchange built and headquartered in Texas.

The goal from the beginning was to rival and surpass the New York Stock Exchange and cater to businesses in the south, Lee said when the stock exchange was announced in June 2024, The Center Square reported. Nearly one year later and that vision is materializing with more businesses from the south joining.

Eleven states in the Boom Belt are leading the economy, job growth and business rankings, Abbott said. He also praised Atkins, his law school classmate, saying, “I’ve never seen anybody come into a position appointed by the president with such a steam of power and such an intense focus to ensure dramatic and swift and robust change. It was desperately needed in the securities market.”

“The momentum taking place across the Boom Belt reflects a deeply American idea: that competition – among firms; among markets; and yes, among states – is the animating force behind a system that has produced more prosperity than any other in human history,” Atkins said. “Competition, as I noted recently in Texas, does not pause for tradition, nor does it defer to legacy jurisdictions. Over time, it compels systems, and States, to adapt – or to yield. Through competition, good ideas spread, poor ones fade, and the system itself grows stronger.”

DeSantis said that healthy competition among Republican-led southern states “has been really good, not just for the people of our individual states, but for the region as a whole. And I think we’ve shown a great framework for how you can succeed and really grow your economies and give people more opportunities.”

Eleven southeastern states “are outpacing every other American quadrant across the measures that matter most, among them gross domestic product, population growth, job creation, foreign investment, and private market activity,” Atkins said. “When capital, companies, and people all move in the same direction – with that kind of consistency, and at that kind of scale – it behooves us to ask why.”

He said the answer lies in “the region’s steady adherence to first principles, including those that rigorously protect investors without needlessly paralyzing companies.”

When announcing the formation of the TXSE, Lee pointed to ESG investment practices and other “woke” policies driving businesses out of investing in New York. Nasdaq Texas for the first time rang its closing bell at the Alamo in Texas on March 5, four months after announcing it was launching its own Texas financial exchange, Nasdaq Texas, The Center Square reported.

This was after the SEC last October approved the TXSE’s application to operate as a national securities exchange in Texas.

The SEC is returning to the first principles that have made Boom Belt states thrive, Atkins said, “by renewing the conditions that make our public markets the natural destination for companies to raise capital and for investors to share in their success.”

He pointed to “decades of accretive rulemakings and regulatory adventurism” that “made the path to becoming a public company narrower – and the experience of remaining one encumbered with rules that can introduce more friction than benefit.”

In the mid-1990s, there were more than 7,800 companies listed on U.S. exchanges when Atkins was chief of staff at the SEC. By the time he returned last year as chairman, that number had dropped by 40%, he said.

“This trajectory tells a cautionary tale that we are working to rectify through the three pillars of my plan to make IPOs great again,” he said.

The first pillar is to modernize, rationalize and streamline disclosure reports “so that they are meaningful, understandable, and not a repellant to investors,” he said.

The second is to ensure the states, and not the SEC, regulate matters of corporate governance. “We must stay in our lane as a disclosure agency and not be a merit regulator.”

The third is to “allow public companies to have litigation alternatives while maintaining an avenue for shareholders to continue to bring forth meritorious claims. At the SEC, we have been hard at work on executing this plan so that we can shield the innovator from the frivolous – and protect the investor from the fraudulent.”

Taken together, he said the reforms “represent something larger than a regulatory agenda” and “herald the SEC’s return to first principles that have made this region’s ascent so remarkable. In many ways, the Boom Belt embodies the best of what we are working toward in Washington.”