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Robinhood Halts Margin Investing In U.K. Launch


Today’s News 

The page about margin investing service on Robinhood's U.K. website was listed as unavailable in the U.K. by Monday evening. 

Image Source: Forbes
The page about margin investing service on Robinhood’s U.K. website was listed as unavailable in the U.K. by Monday evening. 
Image Source: Forbes 

Trading app Robinhood has decided to delay its plans to offer margin investing to customers in the U.K. while it engages in further discussions with regulators. This decision comes as Robinhood launches its U.K. business, initially intending to provide leveraged trading options.  

Margin investing, a risky practice where customers borrow money to amplify their trades, was set to be a feature with an interest rate of 12%. However, a page detailing this service on Robinhood’s U.K. website became unavailable in the U.K. by Monday evening.  

A spokesperson for Robinhood stated that margin investing is on hold as they continue discussions with regulators, without specifying the regulator or providing further details. The U.K.’s Financial Conduct Authority declined to comment on the regulatory exemption or its status for Robinhood. 

Previously, Robinhood had abandoned plans for a U.K. launch in 2020 but announced a renewed effort in November. The U.K. arm of Robinhood will enable customers to purchase U.S. stocks, excluding those of companies listed elsewhere, and will not charge commission or FX fees on trades.  

Additionally, it will offer a 5% interest rate on uninvested cash. Jordan Sinclair, CEO of Robinhood U.K., refrained from commenting on the profitability timeline or revenue sources for the U.K. arm, mentioning that it would mirror revenue models in the U.S., possibly including a subscription service and income from cash interest. 

Despite a surge in popularity among U.S. retail investors during the 2021 meme stock trading frenzy, Robinhood’s shares have declined by nearly 50% since its IPO in 2021, reflecting a cooling of the retail trading fervor. 

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