Robinhood UK launches delayed margin lending investing

Robinhood UK has launched a margin investing feature after it was previously delayed by regulators.

Margin investing allows customers to borrow money from Robinhood, leveraging their existing holdings to purchase additional securities

When Robinhood UK was launched in the UK in March, the company originally stated that it could charge 12 per cent interest on the loans and offer the product due to a “regulatory exemption” meaning it would not be required to assess customers on whether margin investing was appropriate for them.

However, this information was later retracted from its website, with a spokesperson for Robinhood stating that the feature was on hold due to discussions with the regulator.

“It’s paused and we’re discussing further with the regulator, but it’s certainly something that we’re developing,” Jordan Sinclair, president of Robinhood UK, told City AM at the time.

Now, the feature has launched with rates that range between 6.25 per cent for under $50,000 (£38,500), to 5.2 per cent for over $50m (£39m).

“With the launch of margin investing, we’re giving our UK customers even more flexibility and tools to enhance their investing strategies,” Sinclair said.

“At Robinhood we understand that investors want access to expand and diversify their portfolios at industry leading rates, in an amazing user experience.”

The launch of Robinhood UK in March was the company’s first step outside the US, after it shot to global infamy in 2021 as the central player in the so-called meme stock frenzy.

The brand tried to launch in the UK in 2020 and failed, and then attempted to buy UK trading app Ziglu in 2022, but backed out again, saying it was focusing on its US business instead.

The business has not set any specific targets for UK growth, but it is entering a tightly packed platform market with tough competition.