When you have a margin account, Robinhood is authorized to lend your securities to other parties, including for short selling, and the specific securities you deposited may not be returned to you.
This analysis describes what Robinhood's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
This provision authorizes use of securities held in margin accounts for third-party lending purposes, including short selling, which means customers' holdings may be used in ways that could affect market prices of those securities, and customers may receive substitute securities rather than their original holdings.
Interpretive note: The full scope of disclosure obligations applicable to securities lending from retail margin accounts continues to evolve under SEC and FINRA guidance.
The updated terms establish new fiduciary verification and personal liability provisions for trust and custodial accounts. Trustees are now required to complete Robinhood's identity verification and onboarding before accessing trust accounts, notify Robinhood promptly of any material changes to the trust (amendments, revocation, trustee changes), and provide the correct taxpayer identification number for the trust. The revised language states that trustees are personally liable for obligations, debts, or negative equity arising from instructions given outside the scope of their authority under the trust instrument or applicable law. Robinhood reserves the right to freeze trust accounts or request updated documentation at any time, and will rely on instructions from any onboarded trustee without requiring consent from co-trustees or verifying compliance with the trust instrument. You should consult a tax advisor regarding the appropriate taxpayer identification number for your trust and review your fiduciary authority under the applicable trust instrument before executing trades.
View change record →Margin account customers authorize Robinhood to lend their securities to third parties, including for short sale purposes; the agreement states that customers may receive equivalent rather than identical securities upon return, and the lent securities may not benefit from the same corporate actions or protections as directly held securities.
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"You authorize us to lend, either to ourselves or to others, any securities held in your margin account. Securities lent may be used by the borrower for any purpose, including short selling. When securities in your account are lent, you may not receive the same securities back and may instead receive securities of the same class and quantity.Excerpt from Robinhood's Customer Agreement (PDF)
REGULATORY LANDSCAPE: Securities lending from customer margin accounts is governed by SEC Rule 15c3-3 (the customer protection rule), FINRA rules regarding use of customer assets, and SEC guidance on fully paid lending programs.
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This provision authorizes use of securities held in margin accounts for third-party lending purposes, including short selling, which means customers' holdings may be used in ways that could affect market prices of those securities, and customers may receive substitute securities rather than their original holdings.
Margin account customers authorize Robinhood to lend their securities to third parties, including for short sale purposes; the agreement states that customers may receive equivalent rather than identical securities upon return, and the lent securities may not benefit from the same corporate actions or protections as directly held securities.
ConductAtlas has identified this type of provision across 296 platforms. See the full comparison.
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