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Revolut Set to Unveil Broker-Dealer License and Rival Robinhood

Revolut will unveil a broker-dealer license, a media report says, with the company planning commission-free retail trading.

Robinhood  (HOOD) - Get Robinhood Report may be facing competition from Revolut, a U.K.-based fintech startup that a media report says is set to announce that it has secured a U.S. broker-dealer license. 

Revolut, a global fintech startup valued at $33 billion, is set to offer commission-free stock trading to U.S. customers after receiving its license, CNBC reported. 

The company would offer free trades while making money on market makers' payments for order flow information. 

The company is taking this tack in the U.S. after an executive said in 2019 that its European operations would not rely on order-flow payments. 

That business model would put the company in direct competition with Robinhood  (HOOD) - Get Robinhood Report and Square  (SQ) - Get Square, Inc. Class A Report.

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Robinhood shares at last check were rising 1.3% to $41.22 while Square shares were little changed at $250.18. 

Revolut needed 16 months to acquire the broker-dealer license through the Financial Industry Regulatory Authority, Revolut Chief Executive Ron Oliveira told CNBC. 

Revolut is approved to be an "introducing broker" and will use New Jersey-based fintech DriveWealth to clear the trades, just as it does for Revolut's European trading business.

Finra “took a deep dive. They asked lots of questions because they wanted to see exactly what the consumer experience was,” Oliveira told CNBC. “It took them a period of time to get comfortable, but we’re very happy they got there.”

Revolut will eventually aim for a public listing in the U.K. and the U.S. and may go for a dual listing, according to the report.