Today’s News
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.
Other News
SEC Fines Advisers For AI Misrepresentation
Two investment advisers, Delphia Inc and Global Predictions Inc, agreed to pay USD 400,000 in combined fines to settle SEC charges for making false claims about their use of artificial intelligence.
Fosun Considers Sale Of Portuguese Bank Stake
Fosun International is contemplating selling its remaining stake in Portugal’s Millennium bcp to enhance working capital, with potential buyers approached including BBVA and CaixaBank.
Alphabet, Tesla Lift Stock Market Amid Rate Cut Concerns
Alphabet and Tesla led a market surge despite rate cut worries. Alphabet surged 4.6% on reports of its AI engine potentially being used in Apple’s iPhone, while Tesla jumped 6.3%, though still down 30% for the year.
