Robinhood CEO Says Securities Unit Granted Underwriter Status

Robinhood Markets' securities business can now serve as an underwriter, CEO Vlad Tenev said in a statement. The approval allows the company's brokerage unit to lead or participate in stock and bond offerings, a role previously reserved for traditional investment banks.

Robinhood has been pushing deeper into capital markets after building a retail trading platform that handles millions of daily orders. The firm already routes trades to exchanges and clears its own transactions. Underwriting adds a new revenue line, letting Robinhood earn fees from corporate issuers rather than only from order flow and margin lending.

Tenev did not detail which regulator granted the underwriter status or when the approval took effect. Robinhood's securities unit filed for underwriter registration with the Financial Industry Regulatory Authority in 2023, according to public records. The approval signals that regulators consider Robinhood's compliance infrastructure adequate for the higher capital and disclosure requirements of syndicate roles.

The move puts Robinhood in closer competition with brokerages like Charles Schwab and Morgan Stanley, which have long earned investment banking fees alongside their retail businesses. Robinhood has already built a small investment banking team and advised on a handful of secondary offerings over the past year.

Robinhood shares rose after the announcement on Tuesday morning. The company reports first-quarter earnings next month, where analysts expect to hear more about the underwriting pipeline and how quickly the unit can generate revenue.