First of the week the head of the Securities and Exchange Commission (SEC) Reported, that the regulator plans to ban payment for the flow of applications. Let me remind you briefly: payment for the flow of requests is the main income of Robinhood, or eighty percent of total revenue. Broker does not charge clients a commission for transactions, but sells information about transactions to market makers in exchange for a part of the income.
Now the heads of Robinhood have responded. “The idea of banning payment for the flow of requests is quite formidable. This is that income, Allowed?? us to offer trading without commissions. Removing it would be a negative for retail financiers.”, - said Robinhood principal lawyer Dan Gallagher.
During the presentation of the latest quarterly report, the heads of Robinhood said, what will be able to adapt in case of cancellation of payment for the flow of calls. It's unclear., what the broker is talking about: in the 2nd quarter 450 from 565 million dollars the company earned specifically on the sale of data.
There is also a positive. Robinhood earned from the sale of data on deals with stocks and options 217 million dollars, or thirty-eight percent of all revenue. Stocks and options are the responsibility of the SEC. But the information about transactions in the cryptocurrency market was brought by the company 233 million. The SEC has nothing to do with this yet.. Completely possible, going forward, Robinhood will focus specifically on the cryptocurrencies market. “We know, that we need to expand income variability ", - said Gallagher.
According to Gallagher, if the SEC prohibits payment for the flow of applications, Robinhood and other brokers will go to court. Virtu Companies, Charles Schwab and Morgan Stanley also make money selling data, but this is not their main source of income. In the meantime, the heads of Robinhood wish to meet with the regulator and discuss the state of affairs.. The company thinks, that the SEC will not impose a ban.
