Robinhood (Nasdaq: HOOD) has launched its brokerage services in the United Kingdom after two failed attempts. However, the hurdles for the broker continued as it dropped margin trading services from its UK offerings hours after the launch.

A “Regulatory Exemption” or Not?

“Margin investing is paused as we continue to discuss with the regulator,” a spokesperson for Robinhood told Reuters.

Margin investing is complex and involves offering leverage to traders, allowing them to take bigger positions. This type of trading is risky as the losses can be substantial if the market moves in the opposite direction.

At launch, a Robinhood UK page about margin trading explained that the company could offer the product in the country due to a “regulatory exemption” and would charge 12 percent interest on loans. However, that page was removed after a few hours.

Zero-Fee Services

Apart from the suspended margin trading, Robinhood is offering trading services with more than 6,000 US-listed stocks to UK customers. To tackle steep competition, the American broker offers commission-free services in the UK and 5 percent interest on uninvested capital.

The broker further highlighted that it will not charge any foreign exchange fees as well when UK traders invest in US-listed stocks. Also, it will offer trading services around the clock, five days a week.

Robinhood, which disrupted the US retail brokerage market with commission-free services, launched services in the UK after two failed attempts. It initially tried to launch services in the UK in 2020 but failed. It then attempted to acquire the UK-based trading app Ziglu, but that deal also did not materialize.

The latest successful launch came as the American broker revealed last year its plans to make another direct attempt to launch services in the UK. The broker additionally entered the European Union with its cryptocurrency exchange services.

Interestingly, Robinhood entered the UK weeks after Public.com, another US-based broker, pulled its services out of the UK, only eight months after the launch.

Source