Robinhood has announced the launch of a new stock lending offering for customers in the United Kingdom.
It is worth noting that the launch of the new product is what can be called a move forward in the process of realizing the company’s intentions to expand its operations in the UK. Robinhood continues its expansion in the United Kingdom.
The launch of a new offer for UK clients was announced on Wednesday, September 4. As part of this solution, which has become part of the Robinhood product and service line, the firm can lend out to clients any fully paid shares in their portfolio. The company is also currently looking to find new interested borrowers.
Jordan Sinclair, president of Robinhood UK, said that stock lending is another innovative way for the firm’s clients in the United Kingdom to implement investments and earn passive income. In this context, he also noted that the company is pleased to provide its retail customers with greater access to the financial system. Jordan Sinclair underlined that the new product is already available in Robinhood’s intuitive mobile app.
The company said that once the stocks are loaned out to customers, they will be able to use the company’s app dashboard to do things like turn the lending enable and disable, see their positions, and track their earnings. Moreover, the firm underlined that in this case, the equities are backed by cash collateral at a third-party bank for additional protection.
The company said that since Robinhood launched in the United Kingdom last November, customers have repeatedly commented on their user experience within the company’s app and what features they think should be added to the list of products and services available on the digital platform. In this context, the firm also noted that clients perceive the absence of commission fees and FX fees on trades as an advantage and a positive trait. Moreover, the company said that customers are pleased with Robinhood’s mobile app, which is easy to use. Clients of the firm also comment positively on the specifics of the main features available in the app. In this case, the highest customer satisfaction was recorded for features such as fractional shares and 24/5 trading.
The company introduced trading offering to its customers in the United Kingdom last year. It is worth noting that in this case, the firm acted within the paradigm of a larger effort to expand into international markets.
In June, the company completed the deal to acquire the cryptocurrency exchange Bitstamp. The cost of this business agreement was $200 million. The acquired cryptocurrency exchange, based in Luxembourg, is Robinhood’s first institutional business. In this case, the company is given access to Bitstamp’s institutional offerings. The list of relevant offerings includes, for example, the white-label solution Bitstamp-as-a-service, institutional lending, and staking.
At the same time, Robinhood is facing problems in some markets. In this context, it is worth mentioning the Wells notice from the Securities and Exchange Commission (SEC) in the United States. The corresponding notice from the US regulator is a sign that the company is likely to face enforcement measures in the short term. Against the backdrop of this interest in Robinhood’s activities from the SEC, concerns are growing about the prospects of the unit of the firm specializing in crypto trading.
The company insists that the crypto assets listed on its platform do not belong to the category of securities. This position of the firm is what can be called a kind of point of disagreement with the opinion of the specified US regulator. The company also stated its intention to fight the SEC’s enforcement efforts.
Dan Gallagher, Robinhoo’s legal and compliance officer, says that after many years of good faith attempts to establish a practice of interaction with the mentioned US regulator to clarify requirements, including an attempt to come in and register, the firm is disappointed that the agency decided to issue Wells notice. The specified notice concerns the company’s crypto business in the United States.
Robinhood in August issued a response to the SEC notice. This was announced by the company’s chief executive officer Vlad Tenev while speaking to the media. According to him, the firm spent a lot of time to make sure that the response was as high-quality as possible. At the same time, Vlad Tenev refused to provide any additional information on the issue during his communication with the media.
Also during the conversation with journalists, the head of Robinhood said that the company’s trading platform did not have issues of a significant nature during the global stock-market selloff, which occurred in early August and caused disruptions in the functioning of some competitors of the firm. At the same time, the media published information that Robinhood’s execution venue, Blue Ocean ATS, suspended overnight trading when the scale of the mentioned selloff overwhelmed its infrastructure.
In the second quarter of 2024, the company recorded an increase in earnings. The revenue of the firm for the corresponding period was fixed at $682 million. This figure increased by 40% compared to the result for the second quarter of 2023 and exceeded Wall Street’s preliminary expectations.
As we have reported earlier, Robinhood Acquires AI-Driven Platform Pluto.
