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 clause establishes the operational framework under which RHS monetizes securities lending activity. By retaining all compensation from lending activities, RHS creates a revenue stream from account assets while margin account holders bear the counterparty risk associated with securities being loaned.
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 holders authorize their securities to be lent without compensation, meaning RHS receives lending fees and rebates while account holders receive no share of those proceeds. The account holder retains ownership rights but the securities are unavailable for sale while on loan to RHS or third parties.
How other platforms handle this
In limited circumstances, we may retain certain information for purposes including safety, security, fraud prevention, and compliance with our legal obligations.
We collect and keep personal data only as needed or allowed for the purposes set out in this Statement, based on the reason we collected the personal data in the first instance and what is permitted under the laws that apply to the processing.
We retain Personal Data that you provide to us where we have an ongoing legitimate business need to do so... When we have no ongoing legitimate business need to process your Personal Data, we securely delete the information or anonymize it...
"You hereby authorize RHS to lend, either to itself or to others, any securities held in your account on margin. RHS may receive compensation in connection with lending your securities and RHS is not required to pay you any portion of that compensation.Excerpt from Robinhood's Customer Agreement (PDF)
Get the research letter
Companies change their terms quietly. We read every version and catch what actually changed. One email a week on the changes that matter and what they mean.
This clause establishes the operational framework under which RHS monetizes securities lending activity. By retaining all compensation from lending activities, RHS creates a revenue stream from account assets while margin account holders bear the counterparty risk associated with securities being loaned.
Margin account holders authorize their securities to be lent without compensation, meaning RHS receives lending fees and rebates while account holders receive no share of those proceeds. The account holder retains ownership rights but the securities are unavailable for sale while on loan to RHS or third parties.
ConductAtlas has identified this type of provision across 275 platforms. See the full comparison.
No. ConductAtlas is an independent monitoring service. We are not affiliated with, endorsed by, or sponsored by Robinhood.