A Robinhood spokesperson said that it was done for “Operational reasons,” without giving additional details, and that the company might decide to add the products back at a later date.
Some of the products that Robinhood users can no longer buy are major stock market components: Enterprise Product Partners, a $45 billion MLP that operates pipelines, is one of the largest energy companies in the U.S., for instance.
“I have been with Robinhood since 2015. I have asked Robinhood several times why they are doing this and all I’ve gotten are non-answers and crocodile smiles.”
Robinhood says that a higher proportion of its customers are nonwhite than at other brokerages, based on a survey of 45,000 users by Dynata conducted for Robinhood.
Some of the products that Robinhood will no longer support are not necessarily straightforward investments-they may make buyers’ taxes slightly more complicated or have characteristics that could prove tricky for newbie investors.
This is not the first time that Robinhood has restricted access to certain investments.
One analyst wrote in an email to Barron’s that Robinhood’s move to restrict products may be a way to keep investors away from certain complex products out of fear of again running afoul of regulators.