A lady’s silhouette holds a smartphone with the Robinhood Markets logo within the background.
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Online investments app Robinhood said Thursday that it’s set to launch its platform within the U.K. in early 2024, marking the corporate’s third attempt at cracking international expansion.
Features include the power to select from 6,000 U.S. stocks and 24-hour trading five days per week. Robinhood currently offers 24-hour trading within the U.S., allowing trades to occur outside 9:30 a.m. ET and after 4 p.m. ET.
Robinhood won’t offer U.K. stocks to start with but will look so as to add them because it brings more products into the platform. The U.K. version won’t include options and other derivatives at launch, either.
Jordan Sinclair, Robinhood’s U.K. chief, said he expects 24-hour trading to be popular, as it can let users trade on market-moving news.
“You get up within the morning, you read the news headlines, after which you will have to attend,” Sinclair said. “Customers actually could make a trade and select their investment strategy and truly act on that market news.”
Robinhood has already tried to launch within the U.K. twice.
A waiting list it rolled out in 2019 saw over 300,000 people join, but the corporate pulled the plug on its U.K. expansion plans, citing soaring demand at home throughout the Covid pandemic as interest in retail investing climbed dramatically.
Then, last yr, it sought to amass British crypto-trading app Ziglu. That deal faltered, nonetheless, and Robinhood was forced to jot down off the worth of its investment, with the corporate reporting a $12 million impairment charge on the failed transaction.
Brits will have the option to hitch a waitlist starting Thursday and shall be notified once they can join for early access at a later cut-off date. In a bid to get more traction fast, Robinhood can be asking users to share a novel referral link with family and friends to maneuver them up the queue.
“My aspiration is to be considered one of the biggest employers in England, nothing would make me happier,” Tenev said. “And, you recognize, there’s lots of great talent. So this, this could possibly be a centre of excellence for Robinhood.”
Dan Moczulski, U.K. managing director of EToro, a rival stock trading platform, said the arrival of more competition within the retail trading market marks “an exciting time for the industry.”
“More competition will all the time be an excellent thing for investors,” Moczulski told CNBC. “As considered one of the leading trading and investing platforms within the UK, it also keeps us on our toes and pushes us to proceed innovating and broadening our product range for our users.”
Robinhood CEO Vlad Tenev said he doesn’t fear “déjà vu” with the firm’s third try to launch within the U.K.
“We have made sure we taken care of all of the small print, the platform is way more robust,” Tenev told CNBC in an interview. “So I do not think that it will be déjà vu. I feel that we’re very confident we’ll have the option to serve the purchasers here tightly.”
Robinhood is launching with a license from the Financial Conduct Authority, the U.K.’s markets regulator, and Tenev says the firm has an excellent relationship with the regulator.
The FCA has previously warned about “gamification” of investments, something the U.S. Securities and Exchange Commission can be frightened about. When contacted by CNBC, an FCA spokesperson said the regulator would not comment on individual corporations, but that corporations are obliged to respect consumer duty standards set out by the regulator.
Regulators are concerned brokerage apps like Robinhood, eToro, and Public, which engage investors with stimulating features like push notifications, colourful graphics, and a game-like interface, may encourage excessive trading that harms investors but is profitable for market-makers.
Customer money shall be held in segregated accounts protected by U.S. Federal Deposit Insurance Commission insurance, Robinhood said, quite than the U.K. Financial Services Compensation Scheme. Robinhood users will have the option to make a 5% annual yield on money held of their accounts.
Robinhood won’t launch payment-for-order-flow within the U.K., which refers back to the practice of routing trades through market-makers like Citadel Securities in return for a slice of the profits. PFOF is banned within the U.K. As an alternative, the firm expects to earn money from other lines of business, including securities lending, margin lending, interest on uninvested money, and its premium Robinhood Gold subscription service.
Payment for order flow can create conflicts of interest, critics say, as brokers have an incentive to direct order flow to market makers offering such arrangements over the interests of their clients.