Texas Stock Exchange Recruits Top ETF Talent from Cboe and Nasdaq

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Strategic Hires Signal Bold Ambitions in ETF Market Expansion


The Texas Stock Exchange (TXSE), an emerging player in the U.S. financial landscape, has made waves by recruiting top-tier exchange-traded fund (ETF) executives from Cboe Global Markets and Nasdaq, aiming to secure a foothold in the lucrative $11 trillion U.S. ETF market. This strategic move involves hiring Robert Marrocco, previously the global head of exchange-traded product (ETP) listings at Cboe, to lead TXSE’s ETP listings efforts, alongside Alison Hennessy, former head of ETP listings at Nasdaq, who joins as managing director of exchange traded products. These appointments underscore TXSE’s intent to position itself as a serious contender in the competitive ETF sector, leveraging the expertise of seasoned professionals to drive growth and attract issuers. Analysts view this as a clear signal that the Texas Stock Exchange is prioritizing ETF market share as a cornerstone of its future operations, even as it awaits regulatory approval to commence trading.

Based in Dallas, TXSE is not yet operational but has already garnered significant attention with its ambitious plans to challenge established giants like the NYSE and Nasdaq. The exchange has raised approximately $161 million from a consortium of about 48 investors, including heavyweights such as BlackRock, Citadel Securities, and Charles Schwab, providing a robust financial foundation. This capital infusion supports its application for regulatory approval from the U.S. Securities and Exchange Commission (SEC), filed in late January 2025, with aspirations to begin listing and trading activities by early 2026. The hiring of Marrocco and Hennessy aligns with TXSE’s broader mission to enhance competition in the U.S. equity markets, particularly in the fast-growing ETF segment, which accounts for nearly 30% of daily trading volume across exchanges. By targeting the ETF market, TXSE aims to capitalize on the increasing demand for exchange-traded funds, which offer investors diversified, cost-effective investment options.

Robert Marrocco brings a wealth of experience to TXSE, having significantly expanded Cboe’s ETF business during his tenure. Since joining Cboe in 2015, he grew its ETF listings from a modest 20 to over 1,000 unique funds worldwide, achieving a near 30% share of new ETP listings in the U.S. under his leadership since 2020. His prior role at NYSE further bolsters his credentials, making him a pivotal figure in TXSE’s strategy to attract ETF issuers seeking liquidity and visibility. Alison Hennessy complements this expertise with her extensive background at Nasdaq, where she led ETP listings for over a decade, including stints at State Street Global Advisors. Together, their combined track record managing more than 40% of U.S. ETPs positions TXSE to offer a compelling value proposition to issuers, potentially disrupting the dominance of established exchanges in the ETF listings space.

The ETF market’s significance cannot be overstated, with total net assets reaching $8.1 trillion by the end of 2023, encompassing 3,108 ETFs, according to the Investment Company Institute. This growth reflects a broader trend of investors favoring ETFs for their flexibility and low costs, driving hundreds of new fund launches annually. TXSE’s focus on this sector is timely, as competition for primary ETF listings intensifies among exchanges. By recruiting top ETF executives from Cboe and Nasdaq, TXSE signals its readiness to compete head-on, leveraging Texas’ business-friendly environment to draw issuers from across the Southeast and beyond. The state’s economic prowess, tied with New York for the second-most Fortune 500 companies at 55, and the newly established Texas Business Court, designed to rival Delaware’s Chancery Court, enhance its appeal as a hub for financial innovation.

TXSE’s operational roadmap hinges on securing SEC approval, a process that involves rigorous scrutiny of its exchange rules, technological infrastructure, and investor protections. The exchange’s Form 1 filing in January 2025 marks the beginning of this journey, with experts estimating a timeline of several months, akin to the approval process for the 24X National Exchange, which spanned from February to November 2024. Once approved, TXSE plans to facilitate trading of corporate securities, ETFs, and American depositary receipts, supported by cutting-edge technology, including data centers in Dallas and an advanced order matching system designed for low latency and high performance. This infrastructure, backed by its substantial capital, positions TXSE to deliver a seamless trading experience, a critical factor in attracting ETF issuers and traders.

The involvement of major investors like BlackRock, a leading ETF provider through its iShares brand, Citadel Securities, a prominent market maker, and Charles Schwab, a brokerage powerhouse, underscores TXSE’s credibility. This consortium not only provides financial support but also strategic insight into the ETF ecosystem, enhancing TXSE’s ability to tailor its offerings. Analysts, including Bryan Armour from Morningstar, interpret the recruitment of Marrocco and Hennessy as a bold statement of intent, suggesting that TXSE could challenge the status quo in ETF listings. However, this move also poses challenges for Cboe and Nasdaq, who lose key talent to a nascent rival, potentially prompting them to refine their own strategies to retain market share.

Beyond traditional ETFs, TXSE’s location in Texas opens possibilities for attracting niche sectors, such as cryptocurrency-related companies, which could benefit from the state’s pro-business policies. This adaptability could broaden its appeal, positioning it as a versatile player in the evolving financial landscape. As the exchange prepares for its 2026 launch, its focus on hiring top ETF executives from Cboe and Nasdaq highlights a deliberate strategy to build a competitive edge in the $11 trillion U.S. ETF market, promising a dynamic shift in how exchange-traded funds are listed and traded in the years ahead.

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