Robinhood will launch in the UK in its latest attempt at international expansion

Robinhood will launch in the UK in its latest attempt at international expansion

  • Online investing app Robinhood said Thursday it is set to launch its platform in the United Kingdom, in the company’s third attempt at international expansion.
  • Features offered by the company include the ability to choose from 6,000 US stocks including Tesla, Amazon and Apple, and 24-hour trading five days a week.
  • Robinhood CEO Vlad Tenev told CNBC that he’s not afraid to “do it again” with the company’s third attempt to launch in the UK, adding that he’s “confident that we will be able to serve customers here tightly.”

Silhouette of a woman holding a smartphone with the Robinhood Markets logo in the background.

Rafael Henrique | soba pictures | Rocket Lite | Getty Images

Online investing app Robinhood said Thursday it is set to launch its platform in the United Kingdom in early 2024, marking the company’s third attempt at an international expansion push.

Features include the ability to choose from 6,000 US stocks and trade 24 hours a day, five days a week. Robinhood currently offers 24-hour trading in the US, allowing trades to be placed outside of 9:30am ET and after 4pm ET.

Robinhood will not offer shares in the UK initially but will look to add them as it brings more products to the platform. The UK version will not include options and other derivatives at launch either.

Jordan Sinclair, head of Robinhood in the UK, said he expects 24-hour trading to be popular, because it will allow users to trade based on news that moves the market.

“You wake up in the morning, you read the headlines, and then you have to wait,” Sinclair said. “Clients can actually place a trade, choose their investment strategy and actually act on market news.”

Robinhood has already tried to launch in the UK twice.

A waiting list launched in 2019 saw more than 300,000 people sign up, but the company has halted its UK expansion plans, citing increased demand at home during the Covid pandemic as interest in retail investment skyrocketed.

Then, last year, it sought to acquire British cryptocurrency trading app Ziglu. However, that deal fell through, and Robinhood was forced to write down the value of its investment, with the company reporting a $12 million impairment charge on the failed deal.

Britons will be able to join the waiting list from Thursday and will be notified when they can sign up for early access later. In an effort to get more traction quickly, Robinhood is also asking users to share a unique referral link with friends and family to move them to the top of the waitlist.

“My ambition is to be one of the biggest employers in England, and nothing would make me happier,” Tenev said. “And you know, there’s a lot of great talent. So, this could be a center of excellence for Robinhood.”

The arrival of more competition in the retail trading market represents an “exciting time for the industry,” said Dan Moczulski, UK managing director of EToro, a rival stock trading platform.

“More competition will always be a good thing for investors,” Mozulski told CNBC. “As one of the UK’s leading trading and investing platforms, it also keeps us on our toes and drives us to continue to innovate and expand our product range for our users.”

Robinhood CEO Vlad Tenev said he does not fear ‘déjà vu’ with the company’s third attempt to launch in the UK.

“We made sure we took care of every detail, and the platform is more robust,” Tenev told CNBC in an interview. “So I don’t think it will be the case before. I think we’re pretty confident that we’ll be able to serve customers here tightly.”

Robinhood was launched with a license from the Financial Conduct Authority, the UK’s markets regulator, and Tenev says the company has a good relationship with the regulator.

The Financial Conduct Authority (FCA) has previously warned against “manipulation” of investments, which is also of concern to the US Securities and Exchange Commission. When contacted by CNBC, an FCA spokesperson said the regulator would not comment on individual companies, but companies are obligated to respect consumer duty standards set by the regulator.

Regulators worry that brokerage apps like Robinhood, eToro and Public, which engage investors with stimulating features like push notifications, colorful graphics and a game-like interface, may encourage excessive trading that is harmful to investors but profitable to market makers.

Robinhood said customer funds will be held in segregated accounts protected by US Federal Deposit Insurance Commission insurance, rather than the UK’s Financial Services Compensation Scheme. Robinhood users will be able to earn a 5% annual return on the cash in their accounts.

Robinhood will not launch its order flow payment system in the UK, which refers to the practice of routing trades through market makers such as Citadel Securities in exchange for a slice of the profits. PFOF is banned in the UK Instead, the company expects to make money from other business lines, including securities lending, margin lending, interest on uninvested cash, and its premium subscription service Robinhood Gold.

Critics say that paying for order flow can create a conflict of interest, as brokers have an incentive to direct order flow to market makers who put such arrangements ahead of their clients’ interests.

(Tags for translation)Stock Markets

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