Robin Hood (HOOD) – Get the Robinhood Report could face competition from Revolut, a UK-based fintech start-up that a media report says is set to announce it has been licensed as a US broker.
Revolut, a global fintech startup valued at $ 33 billion, is expected to offer commission-free stock trading to U.S. clients after receiving its license, CNBC reported.
The company would offer free trades while making money on payments from market makers for order flow information.
The company is taking this approach in the United States after an executive said in 2019 that its European operations would not depend on order flow payments.
Robinhood shares at last check were up 1.3% to $ 41.22, while Square shares were little changed at $ 250.18.
Revolut took 16 months to acquire the broker’s license through the Financial Sector Regulatory Authority, Revolut chief executive Ron Oliveira told CNBC.
Revolut is approved as an “Introducing Broker” and will use New Jersey-based fintech DriveWealth to clear trades, just as it does for Revolut’s European business operations.
Finra “took a deep dive. They asked a lot of questions because they wanted to see exactly what the consumer experience was, ”Oliveira told CNBC. “It took them a while to get comfortable, but we’re very happy they got there. “
Revolut will eventually aim for public listing in the UK and US and may opt for dual listing, according to the report.