The Texas Stock Exchange (TXSE), which just began live trading in July, is already proposing a significant change to how uninstructed shares get voted at its listed companies.
On May 28, 2026, TXSE filed a proposal with the SEC to amend its existing rules to establish a mandatory process for the proportional allocation and voting of uninstructed shares held by Members of the TXSE on behalf of beneficial owners of TXSE-listed equity securities.
Under the proposal, a “Covered Member” would be required to:
- Submit a proxy designating uninstructed shares as present at the meeting, regardless of whether any matter on the ballot for such meeting would otherwise qualify as a “routine” matter permitting discretionary voting under the rules of any other national securities exchange or association of which such Covered Member is a member.
- Allocate votes proportionally. On each proposal, uninstructed shares would be voted FOR, AGAINST, and ABSTAINING (or WITHHOLD, where applicable) in the same proportion as the aggregate voting instructions the Member actually received from beneficial owners who submitted voting instructions with respect to such proposal, with the calculation performed separately for each proposal on the ballot.
- Vote all uninstructed shares ABSTAIN if the Covered Member receives no voting instructions from any beneficial owner on a given proposal.
- Round down any fractional share resulting from the allocation formula to the nearest whole share, with the remainder shares being allocated to ABSTAIN.
- Maintain records of the proportional allocation methodology applied, consistent with Exchange Act rules.
TXSE Members acting as executors, administrators, guardians, trustees, or in similar capacities, are carved out of the requirements, as are named ERISA Plan investment managers and designated investment advisers.
The current TXSE prohibition against Members voting a proxy in their own discretion on director elections, executive compensation, and other significant matters (as required by Dodd-Frank) would continue to apply to securities and accounts outside the scope of the proposed rules, including securities not listed on TXSE and shares otherwise excluded from the proposed proportional allocation requirement. For shares within the scope of the proposed rules, the proposed rules clarify that the mandatory allocation is not “discretion” at all, since the outcome is fixed entirely by a formula with no Member judgment involved; resolving a potential conflict between the new rules and the Dodd-Frank prohibition on discretionary voting with respect to those designated matters.
In support of the proposal, TXSE points to the SEC’s own reasoning from its 2009 order approving amendments to NYSE Rule 452 that eliminated broker discretionary voting in director elections (that voting outcomes should track economic interest, not broker judgment) and argues its uniform formula simply extends that logic to every matter on the ballot, replacing NYSE Rule 452’s routine/non-routine patchwork.
That patchwork, TXSE argues, is precisely the problem. Whether an uninstructed share affects quorum, increases the effective approval threshold for a proposal, or gets counted at all currently depends on which proposals happen to appear on a given ballot and how another self-regulatory organization has classified them, rather than on anything about the beneficial owner or the security itself. That classification exercise, TXSE contends, does not even track economic significance particularly well. Measures such as reverse stock splits or increases in authorized shares can carry real consequences for shareholders, yet they often get treated as “routine,” leaving them open to broker discretionary voting under the current framework.
The SEC has until September 9, 2026, to approve, disapprove, or start proceedings to consider disapproving the proposed rules.