Robinhood has a legal claim over all of the investments and assets in your account as collateral for any money you owe them, and they can lend out your securities held in a margin account to other parties.
All securities in your Robinhood margin account can be lent to other parties (such as short sellers) without your specific consent, and Robinhood holds a priority claim over all your account assets as collateral for any debt you owe. SIPC insurance covers up to $500,000 in securities but does not cover losses from rehypothecation in the event of broker insolvency.
Cross-platform context
See how other platforms handle Security Interest in All Account Assets and similar clauses.
Compare across platforms →By granting Robinhood a security interest over all account assets, you allow them to use your investments as collateral and lend them to third parties — meaning if Robinhood faced financial difficulties, your assets could be at risk beyond standard SIPC protections.
REGULATORY FRAMEWORK: This provision implicates SEC Rule 15c3-3 (Customer Protection Rule, 17 CFR 240.15c3-3), which governs broker-dealer obligations to safeguard customer assets and restricts rehypothecation to 140% of customer debit balances. The UCC Article 9 governs the security interest and lien created under this clause. SIPC coverage under 15 U.S.C. §78aaa et seq. provides up to $500,000 protection (including $250,000 cash) but does not cover rehypothecated assets that are not returned. Regulation T (12 CFR Part 220) provides the framework under which margin lending and associated pledging occur.
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