Beautiful Virgin Islands

Tuesday, Jun 03, 2025

Robinhood CEO says US markets need major system upgrade

Robinhood CEO says US markets need major system upgrade

Securities transactions are currently settled in two business days
Robinhood Markets Inc. cofounder and CEO Vladimir Tenev says it is time for U.S. financial markets to adopt a real-time settlement system.

The current system, T+2, means that securities transactions are settled in two business days. The antiquated system says that even if a broker like Robinhood has the money, it must still put up more cash as collateral.

The system “exposes investors and the industry to unnecessary risk and is ripe for change,” Tenev said in a Robinhood blog post on Tuesday following an intense week of market volatility that put the firm in the crosshairs with clients and politicians.

The Financial Industry Regulatory Authority [FINRA], which ensures market integrity, declined to comment.

Robinhood was forced to restrict customer trades in some highly volatile securities over the past week as a surge in trading volume in highly volatile stocks strained its abilities to cover clearinghouse deposit requirements. The online broker was forced to raise $4 billion from early investors in order to meet the requirements.

The Robinhood debacle demonstrates a “glaring weakness in our financial system,” said James Angel, associate professor of finance at Georgetown University’s McDonough School of Business.

Angel said the settlement system should at worst operate on the T+1 system that the U.S. Treasury market and futures markets have used for some time. However, he agrees with Tenev that a T+midnight system would be ideal.

“You have the money in your account today, you buy it and you become the beneficial owner tonight. That's where we need to be going,” Angel said.

However, he concedes a change to real-time settlement won’t be easy. There are 4,000 broker-dealers in the U.S. and they would all have to update their systems, which costs time and money.

“The big savings to the industry is they don't have as much money tied up in collateral and they don't have as much risk,” Angel said. “But they're not in any hurry to upgrade their back-office systems because those are not profit centers.”
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
China Accuses US of Violating Trade Truce
Panama Port Owner Balances US-China Pressures
France Implements Nationwide Outdoor Smoking Ban to Protect Children
German Chancellor Merz Keeps Putin Guessing on Missile Strategy
Mandelson Criticizes UK's 'Fetish' for Abandoning EU Regulations
British Fishing Boat Owner Fined €30,000 by French Authorities
Dutch government falls as far-right leader Wilders quits coalition
Harvard Urges US to Unfreeze Funds for Public Health Research
Businessman Mauled by Lion at Luxury Namibian Lodge
Researchers Consider New Destinations Beyond the U.S.
53-Year-Old Doctor Claims Biological Age of 23
Trump Struggles to Secure Trade Deals With China and Europe
Russia to Return 6,000 Corpses Under Ukraine Prisoner Swap Deal
Microsoft Lays Off Hundreds More Amid Restructuring
Harvey Weinstein’s Publicist Embraces Notoriety
Macron and Meloni Seek Unity Despite Tensions
Trump Administration Accused of Obstructing Deportation Cases
Newark Mayor Sues Over Arrest at Immigration Facility
Center-Left Candidate Projected to Win South Korean Presidency
Trump’s Tariffs Predicted to Stall Global Economic Growth
South Korea’s President-Elect Expected to Take Softer Line on Trump and North Korea
Trump’s China Strategy Remains a Geopolitical Puzzle
Ukraine Executes Long-Range Drone Strikes on Russian Airbases
Conservative Karol Nawrocki wins Poland’s presidential election
Study Identifies Potential Radicalization Risk Among Over One Million Muslims in Germany
Good news: Annalena Baerbock Elected President of the UN General Assembly
Apple Appeals EU Law Over User Data Sharing Requirements
South Africa: "First Black Bank" Collapses after Being Looted by Owners
Poland will now withdraw from the EU migration pact after pro-Trump nationalist wins Election
"That's Disgusting, Don’t Say It Again": The Trump Joke That Made the President Boil
Trump Cancels NASA Nominee Over Democratic Donations
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OnlyFans for Sale: From Lockdown Lifeline to Eight-Billion-Dollar Empire
Mayor’s Security Officer Implicated | Shocking New Details Emerge in NYC Kidnapping Case
Hegseth Warns of Potential Chinese Military Action Against Taiwan
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Jamie Dimon Warns U.S. Bond Market Faces Pressure from Rising Debt
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Taylor Swift Gains Ownership of Her First Six Albums
Bangkok Ranked World's Top City for Remote Work in 2025
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
×