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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
The security interest establishes a creditor claim against account assets that Robinhood can assert to satisfy customer obligations. The rehypothecation authorization permits Robinhood to use customer securities as collateral for its own borrowing or lending activities, a standard practice in margin account operations that generates operational and capital benefits for the broker.
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 →Customers with margin accounts operate under terms that authorize Robinhood to pledge, lend, or rehypothecate their securities without separate notice for each transaction. The security interest means Robinhood holds a claim against account assets that takes priority for satisfying customer debt obligations to the firm.
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"As security for the discharge of all present and future indebtedness and obligations owing by you to Robinhood Securities, you hereby pledge and grant to Robinhood Securities a security interest in and lien upon all securities and other property now or hereafter held, carried or maintained by Robinhood Securities for your account, and all proceeds thereof, including but not limited to securities acquired by you in your account. You authorize Robinhood Securities to use, lend, pledge or rehypothecate any and all securities held in a margin account without further notice to you.Excerpt from Robinhood's Customer Agreement (PDF)
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The security interest establishes a creditor claim against account assets that Robinhood can assert to satisfy customer obligations. The rehypothecation authorization permits Robinhood to use customer securities as collateral for its own borrowing or lending activities, a standard practice in margin account operations that generates operational and capital benefits for the broker.
Customers with margin accounts operate under terms that authorize Robinhood to pledge, lend, or rehypothecate their securities without separate notice for each transaction. The security interest means Robinhood holds a claim against account assets that takes priority for satisfying customer debt obligations to the firm.
ConductAtlas has identified this type of provision across 1 platforms. See the full comparison.
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