If you participate in Robinhood's securities lending program, Robinhood may lend your stocks or other securities to other parties, and while on loan those securities are not covered by SIPC insurance, though collateral is provided.
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 Robinhood to lend securities you own to third parties, which removes SIPC insurance protection on those securities while they are on loan and introduces counterparty risk associated with the borrower.
Participating users' fully paid securities may be lent to third-party borrowers, including Robinhood affiliates, and those securities lose SIPC coverage during the loan period; users receive collateral but bear exposure to the adequacy of that collateral arrangement.
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"By participating in the Securities Lending Income Program, you authorize Robinhood to lend your fully paid and excess margin securities to borrowers, including Robinhood affiliates and third parties. You understand that when your securities are on loan, they will not be covered by SIPC protection, although Robinhood will provide collateral to protect the market value of your securities.Excerpt from Robinhood's Margin Account Rules
REGULATORY LANDSCAPE: Securities lending of customer fully paid securities by broker-dealers is governed by FINRA Rule 4330, which requires written customer authorization, maintenance of 100% collateral, and specific disclosure obligations.
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This provision authorizes Robinhood to lend securities you own to third parties, which removes SIPC insurance protection on those securities while they are on loan and introduces counterparty risk associated with the borrower.
Participating users' fully paid securities may be lent to third-party borrowers, including Robinhood affiliates, and those securities lose SIPC coverage during the loan period; users receive collateral but bear exposure to the adequacy of that collateral arrangement.
ConductAtlas has identified this type of provision across 296 platforms. See the full comparison.
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