United States securities and exchange commission logo
July 26, 2021
Vladimir Tenev
Chief Executive Officer
Robinhood Markets, Inc.
85 Willow Road
Menlo Park, CA 94025
Re: Robinhood Markets,
Inc.
Amendment No. 1 to
Registration
Statement on Form S-1
Filed July 19, 2021
File No. 333-257602
Dear Mr. Tenev:
We have reviewed your amended registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Amendment No. 1 to Form S-1 Filed July 19, 2021
Prospectus Summary, page 1
1. Please revise the
beginning of your summary disclosure to explain payment for order flow
(PFOF) and to provide
specific information regarding PFOF, including the importance of
PFOF to Robinhood, the
regulatory scrutiny surrounding PFOF, the related risks to
Robinhood s business
and financial condition, and the impact of those risks to investors.
2. Please refer to the
second full paragraph on page 4. In light of the inherent trade-offs and
opportunity costs to
users under no-commission trading models, please remove the
references to
"lowest-cost."
Vladimir Tenev
Robinhood Markets, Inc.
July 26, 2021
Page 2
3. We note your disclosure on page 4 that the S&P 500 has produced an
average annual
return of approximately 13% since 2010 and that this has coincided
with an increase in
participation among retail investors. Please expand your disclosure to
address the impact
that long periods of price declines, for example the market declines
in 2001 and 2008-
2009 and quantify the percentage of decline during those periods, a
flat market, or other
factors, which may reduce retail investor participation, could have on
Robinhood s
business and the impact to investors.
Risk Factors, page 35
4. Please revise to include risk factor and summary risk factor
disclosure focused on best
execution and execution quality practices. In particular, please
address how regulatory
changes or changes in rules could impact your business, and describe
the potential impact
to investors.
Because a majority of our revenue is transaction-based..., page 39
5. You state that you "do not consider transaction fees when routing
orders." Please revise
here and throughout the prospectus to describe without qualification
only the relevant
factors you consider in routing equity and option orders.
6. Please refer to the subsection "Risks Related to Regulation of PFOF."
Please revise here
and throughout the prospectus your description of the May 2019 SEC
Enforcement
investigation to clarify that the investigation alleged that you made
misleading statements
to customers on your website, including in FAQs relating to your PFOF
practices.
Business
Best Execution, page 203
7. We note your disclosure on the carry-over paragraph at the top of page
204 that "[t]hese
PFOF arrangements are permitted under SEC guidelines and FINRA rules."
Please revise
your disclosure to clarify that the SEC has not provided specific
approval of Robinhood s
PFOF arrangements.
Legal Proceedings, page 206
FirstName LastNameVladimir Tenev
8. We note your disclosure on pages 52, 55 and 207 that you have received
inquiries related
Comapany NameRobinhood
to employee Markets,
trading. Please Inc. your risk factor and legal
proceedings disclosure to
revise
July 26,provide more2 specific information regarding the nature of such
inquiries.
2021 Page
FirstName LastName
Vladimir Tenev
FirstName
RobinhoodLastNameVladimir Tenev
Markets, Inc.
Comapany
July NameRobinhood Markets, Inc.
26, 2021
July 26,
Page 3 2021 Page 3
FirstName LastName
You may contact Marc Thomas, Staff Accountant, at (202) 551-3452 or
Hugh West,
Accounting Branch Chief, at (202) 551-3872 if you have questions regarding
comments on the
financial statements and related matters. Please contact J. Nolan McWilliams,
Attorney-
Advisor, at (202) 551-3217 or Sandra Hunter Berkheimer, Legal Branch Chief, at
(202) 551-
3758 with any other questions.
Sincerely,
Division of
Corporation Finance
Office of Finance
cc: D. Scott Bennett