Which regulatory agencies enforce this type of clause?

{'agency': 'SEC', 'reason': 'The SEC has jurisdiction over broker-dealer liability limitation clauses that may conflict with customer protection obligations under Rule 15c3-3 and federal securities law anti-waiver provisions.', 'complaint_url': 'https://www.sec.gov/tcr'}

What is the severity of this clause?

ConductAtlas classifies this Limitation of Liability clause as high severity. Severity reflects the magnitude of rights affected, the breadth of users impacted, and the degree of discretion the platform retains.

Do other platforms have similar clauses?

Yes. ConductAtlas has identified similar Limitation of Liability clauses across approximately 113 other tracked platforms. You can compare how platforms differ on this clause type in the cross-platform comparison view.

Limitation of Liability — Robinhood

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What it is

Robinhood's agreements limit its financial liability to users for losses caused by platform failures, outages, or errors, capping the amount users can recover even if those failures cause significant investment losses.

Consumer impact (what this means for users)

If Robinhood's platform fails during a critical trading period and you suffer investment losses as a result, liability limitation clauses in Robinhood's agreements may prevent you from recovering the full value of those losses, even when the failure is Robinhood's fault.

Cross-platform context

See how other platforms handle Limitation of Liability and similar clauses.

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Why it matters (compliance & risk perspective)

Liability caps mean that if Robinhood's platform goes down during a market crash or trading frenzy — as happened in March 2020 and January 2021 — users may be legally prevented from recovering the full financial losses caused by Robinhood's system failures.

Institutional analysis (Compliance & legal intelligence)

(1) REGULATORY FRAMEWORK: Limitation of liability clauses in broker-dealer agreements are subject to SEC Rule 15c3-3 customer protection requirements, FINRA Rule 2010 (commercial honor), and common law unconscionability doctrines. Exculpatory clauses that purport to waive FINRA or SEC regulatory claims are generally unenforceable under federal securities law. State law unconscionability standards vary in their treatment of financial services liability caps. (2)

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Applicable agencies

SEC

The SEC has jurisdiction over broker-dealer liability limitation clauses that may conflict with customer protection obligations under Rule 15c3-3 and federal securities law anti-waiver provisions.
File a complaint →

Provision details

Document information

Document

Robinhood Margin Account Rules

Entity

Robinhood

Document last updated

April 29, 2026

Tracking information

First tracked

March 15, 2026

Last verified

April 27, 2026

Record ID

CA-P-003307

Document ID

CA-D-00052

Evidence Provenance

Source URL

https://cdn.robinhood.com/assets/robinhood/legal/RHS%20Customer%20Margin%20and%20Short%20Account%20Agreement.pdf

Wayback Machine

View archived versions →

SHA-256

71437511b2ed24920093d597ba4748833f9cd349af943fefda81a8347e5b73c1

Verified

✓ Snapshot stored ✓ Change verified

How to Cite

ConductAtlas Policy Archive
Entity: Robinhood | Document: Robinhood Margin Account Rules | Record: CA-P-003307
Captured: 2026-03-15 10:58:05 UTC | SHA-256: 71437511b2ed2492…
URL: https://conductatlas.com/platform/robinhood/robinhood-margin-account-rules/limitation-of-liability/
Accessed: May 2, 2026

Classification

Severity

High

Limitation of Liability