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Robinhood, SEC Unleash Retail

Writer: Michael Sacchitello
Michael Sacchitello
Oct 1
11 min read

Updated: 17 hours ago

The SEC's tokenization order reads like a green light. The 0.25% volume cap says otherwise.


FatTail Weekly

Week of September 24 to October 1, 2026

A concise briefing on the technologies, companies and ideas changing how people invest, trade and manage wealth.


The Week's Big Picture

Regulators spent the week loosening their grip on what investors can buy while the IRS shut down a way to avoid tax on it. The SEC proposed letting advisers and funds use state trust companies and, in limited cases, self-custody for crypto. Separately, it proposed easing retail access to private funds, while the IRS ruled that Section 351 ETF conversions used to swap out appreciated holdings are taxable.


Robinhood pushed retail in the same direction as the SEC, announcing AI trading agents, 10x crypto perpetuals, 4x intraday margin and weekend stock trading, with Cboe earnings-metric contracts to be sold sans fees through December.


The companies that control the accounts and custody services may benefit from this shift, while firms that marketed Section 351 ETF conversions as a way to defer taxes could come under added pressure. Large custodians such as BNY Pershing are also rethinking some of their advisor offerings.


But the IRS ruling does not mean ETFs themselves are in trouble. Just three days before the ruling, Northern Trust said it plans to move $32.9 billion in mutual fund assets into ETFs by converting existing funds. Nice dodge.


Note: What follows is an AI-generated summary of this week's top industry developments.


Top Developments

Robinhood Gives Retail Customers AI Trading Agents, 10x Crypto Perpetuals and Weekend Stocks


Long story short: Robinhood used its HOOD Summit on September 29 to announce Robinhood Agents for eligible US customers, crypto perpetual futures with up to 10x leverage, weekend trading in selected US stocks, longer options hours and up to 4x intraday margin. Most features arrive between October and early next year, and weekend equities are pending regulatory review.


The juicy bits:

  • Each agent trades from a dedicated account; models come from OpenAI and other labs, and Fortune names Anthropic.

  • Trade approval is on by default and adjustable; Robinhood says 150,000-plus agentic accounts opened since May.

  • Eight coin perpetuals via Bitstamp: 10x on bitcoin and ether, 3x on others, 0.01% fees through year-end.

  • Weekend trading in a curated stock and ETF list runs through Bruce ATS, targeted for early next year.

  • Options hours stretch to 7:30 a.m. to 4:15 p.m. in October, a 35% increase, on symbols including SPY.


The FatTail take: Robinhood is selling this as hedge-fund tools for everyone, and every item on the list is built to make customers trade more often. Leverage, weekend hours and an agent whose approval step can be switched off all push the same direction, and the regulator reviewing the weekend product will notice. Schwab, Fidelity and Interactive Brokers now have to decide whether to match an agent product aimed at their most active customers or give that segment to Robinhood.


IRS Rules That Section 351 ETF Conversions Used to Swap Out Holdings Are Taxable


Long story short: The IRS released Revenue Ruling 2026-20 and Notice 2026-62 on September 28, ruling that an investor who moves appreciated securities into a new ETF that then hands those same securities to an authorized participant has made a taxable exchange. The notice names more fund strategies Treasury considers potentially abusive and asks for comments by October 28.


The juicy bits:

  • The notice expresses no view on seeding an ETF with assets that fit its thesis and stay in the fund.

  • Box spread funds, record-date "no dividend" strategies and workarounds of fund income tests are also named.

  • The ruling states no effective date; Ropes & Gray reads that as possible retroactive application.

  • Treasury says it may later designate some strategies as listed transactions or transactions of interest.

  • InvestmentNews counts over 100 ETFs seeded via Section 351 since 2021, with more than $20 billion at launch.


The FatTail take: One specific pitch is dead: roll a concentrated, appreciated portfolio into a new ETF, have the fund hand those same shares to an authorized participant, and owe nothing. The issuers and advisors who marketed 351 conversions on that basis are exposed, while issuers that seeded funds with assets they meant to keep are safe on the IRS's own wording. With no effective date in the ruling and Ropes & Gray flagging possible retroactive application, any advisor who ran clients through that structure should be talking to tax counsel before the October 28 comment deadline.


SEC Proposes Letting Advisers and Funds Use State Trust Companies and Self-Custody for Crypto


Long story short: The SEC proposed on October 1 to let registered investment advisers and regulated funds hold crypto assets with state trust companies as custodians and, in limited circumstances, through self-custody. The proposal amends rules under the Advisers Act and the Investment Company Act, with comments due 60 days after Federal Register publication.


The juicy bits:

  • The Block reports self-custody is limited to cases where no permitted custodian exists.

  • It also updates adviser audit requirements and broker-dealer custody standards for regulated funds.

  • Chair Paul Atkins said the rules "have not kept pace" with a "multi-trillion-dollar asset class."

  • Commissioner Hester Peirce said true self-custody "is not the right choice for everyone."

  • Better Markets called state trust company oversight "an inconsistent hodgepodge of less rigorous rules."


The FatTail take: State-chartered crypto trust companies are the winners, because this proposal makes them acceptable custodians for adviser and fund crypto. Better Markets is right about self-custody: an adviser holding its own clients' crypto is exactly the conflict custody rules exist to prevent, and a narrow carve-out does not remove that conflict. If the SEC finalizes this as proposed, advisers who have kept crypto out of client accounts on custody grounds lose that excuse.


Cboe Plans Binary Contracts on Company Earnings Metrics, With Robinhood as First Broker


Long story short: Cboe said on September 30 it plans to list binary contracts tied to key performance indicators at 23 US-listed companies on its SEC-regulated securities exchange, with Robinhood as the first retail broker to offer them. Launch is expected in October, subject to regulatory approval.


The juicy bits:

  • Neither Cboe nor Robinhood will charge fees on the contracts through the end of 2026.

  • Robinhood says trading them will require options approval.

  • Robinhood's examples: beating earnings, hitting revenue targets and other company financial milestones.

  • Cboe's JJ Kinahan called them "a granular way to trade many of the individual components" of results.

  • Derivatives head Rob Hocking cited Cboe's strengths across listing, trading and clearing.


The FatTail take: Cboe just put prediction-market mechanics on an SEC-regulated stock exchange, and that is the most serious competitive answer yet to the event-contract platforms. A yes-or-no bet on one line of an earnings report is a single-stock option with the complexity stripped out and the payoff capped, and placing it beside options in Robinhood's app will pull volume from both. The fee waiver through December shows Cboe intends to buy that early volume.


BNY Pershing Is Dismantling Wove Three Years After Launch


Long story short: BNY Pershing is breaking up Wove, the multi-custodial advisor platform Pershing X launched in 2023, and folding its strongest parts into BNY's wider wealth solutions business, WealthManagement.com reported on September 29.


The juicy bits:

  • Adam Vos, global head of wealth solutions since January, is running the restructuring.

  • Ainslie Simmonds, who led Wove's 2023 launch, left in June 2026.

  • Known Wove users include TIAA, Sanctuary Wealth and Steward Partners; BNY gave no advisor count.

  • BNY promises a unified offering with BNY custody "or a custodian of their choosing."

  • Coverage cites no sunset date or migration timeline for current Wove users.


The FatTail take: A dedicated startup unit, a named launch leader who has since left and three years of effort, and BNY is taking Wove apart: that is a verdict on the product. The lesson for every custodian is that building your own advisor desktop is a losing bet against the specialist vendors advisors already use. TIAA, Sanctuary and Steward Partners should demand a written migration timeline this quarter, because none has been published.


Savvy Wealth Opens a Fidelity-Cleared Account Platform to Outside RIAs


Long story short: Savvy Wealth launched the Savvy Custodial Platform on September 23, a white-labeled account-opening and asset-transfer front end that independent RIAs outside Savvy can use, with clearing by Fidelity's National Financial Services.


The juicy bits:

  • Savvy claims client onboarding in "as little as 90 seconds."

  • Savvy Wealth Management LLC is the introducing broker-dealer; Savvy entities hold no client assets.

  • A corrected release on September 28 states the platform is not a separate legal entity or custodian.

  • It connects CRM, billing, trading and reporting; access is by waitlist, and no pricing is disclosed.

  • WealthManagement.com puts Savvy at $9 billion AUM after a $100 million Series C at $600 million.


The FatTail take: Savvy is going after the piece of the advisor's day that custodians most want to own, the account-opening screen, while renting custody from Fidelity. That makes Savvy a distribution channel for NFS and a direct rival to every custodian's own advisor portal in the fight for breakaway advisors. Until Savvy publishes a price and drops the waitlist, this is a recruiting tool for its own firm more than a platform for anyone else.


The SEC and DTCC Both Moved to Push Private Markets Into Retail Accounts

Long story short: The SEC voted on September 30 to propose rule changes that widen retail routes into private markets, two days after DTCC made a strategic investment in iCapital and agreed to connect its Alternative Investment Product to iCapital's platform.


The juicy bits:

  • The proposal widens performance-based fees advisers can charge regulated funds and loosens interval-fund repurchase schedules.

  • Closed-end funds would get a rules-based path to multiple share classes, replacing exemptive orders.

  • The SEC asks whether a FINRA exam, CFA, CFP or CPA should confer accredited status.

  • Comments run 60 days from Federal Register publication.

  • iCapital services $1.2 trillion, including $327 billion in alternatives, for nearly 3,900 wealth firms.


The FatTail take: The SEC is building retail demand for private funds and DTCC is buying into the pipes, and iCapital wins on both counts. Performance fees inside registered funds will bring more private-market product to retail, and the processing of that volume lands on iCapital and DTCC. Wealth platforms without a private-markets workflow by the time this rule is final will be routing that business through iCapital.



Also Worth Knowing

  • Public launched AI agents for prediction markets on September 24 with CFTC-regulated Kalshi as the exchange, letting members program agents to trade stocks, bonds or options when an event probability, such as a Fed rate cut or an FDA approval, crosses a set threshold. PR Newswire

  • Kalshi told the CFTC it will end its Volume Incentive Program, which has paid traders for liquidity since March 2023, no earlier than October 13, after an X user and The Wall Street Journal questioned repeated trades in its ether perpetuals, which Kalshi attributes to market makers' fixed quotes while saying it is not under investigation. The Block

  • The SEC fined Zoe Financial $450,000 on September 28 for failing until December 2024 to disclose its financial incentive for matched advisers to use its Zoe Wealth sub-advisory service, while its salespeople often recommended advisers its matching algorithm had not initially suggested. SEC press release 2026-94

  • Adhesion Wealth, an AssetMark affiliate, launched Custom Model Solutions on September 28, letting RIAs build firm-specific model portfolios with Fidelity on Adhesion's UMA platform with daily automated tax management and no Adhesion platform or tax-management fee. GlobeNewswire

  • Range, an AI-driven wealth manager for high earners that charges no AUM fee, moved custody, clearing and trade execution onto Apex Fintech Solutions' AscendOS on September 28. Business Wire

  • XYPN signed Jump on September 30 to give its members discounted access to Jump's meeting, onboarding and growth tools, including in-meeting account opening at Schwab and Fidelity, a week after Northwestern Mutual chose Jump for its field force. WealthManagement.com

  • ARK Invest tokenized its ARK Venture Fund (ARKVX), a closed-end interval fund whose holdings include OpenAI, Anthropic, Stripe and Databricks, on Ethereum through Securitize on September 24, though liquidity is still limited to periodic repurchase offers. Securitize

  • Northern Trust Asset Management said on September 25 it will convert six mutual funds holding $32.9 billion, led by the $19.3 billion Northern Stock Index Fund, into ETFs in the first quarter of 2027, after fund board approval; it held $27 billion in ETF assets at June 30, and The Daily Upside calls it the largest such conversion recorded. Northern Trust release (Business Wire) · The Daily Upside

  • Eaglebrook launched direct indexing for crypto on September 30, letting advisors run the S&P Cryptocurrency Top 10 Equal Weight Index in separately managed accounts with direct ownership of the coins, automated tax-loss harvesting and in-kind funding of existing holdings; Eaglebrook calls it the industry's first, and disclosed no fees. Eaglebrook release (Business Wire)

  • Orion said on October 1 it will open a Model Context Protocol connection to its 500-plus integration providers in the coming weeks, alongside a new integration certification program with sandbox access, published rate limits and wider access to Orion and Redtail CRM APIs; no pricing was given. Orion release (Business Wire)

  • The Federal Reserve proposed two GENIUS Act rules on September 24 for the payment stablecoin issuers it supervises: one sets reserve-asset, capital, risk-management and reserve-safekeeping requirements, with reserves in assets such as short-term Treasury bills, and the other sets the application process for supervised banks that want to issue stablecoins; comments run 60 days from Federal Register publication. Federal Reserve press release


What We're Watching

Weekend stock trading has arrived on a retail roadmap before the weekday overnight session has even launched. Robinhood says weekend trading in a curated list of US stocks and ETFs will run through Bruce ATS early next year, pending regulatory review, while Nasdaq's 9:00 p.m. to 4:00 a.m. overnight session does not start until December 6 and OCC's extended-hours clearing framework was approved only on September 23. A Saturday fill still has to clear and settle somewhere, and whatever review Robinhood is waiting on will have to decide who carries that risk from Friday night to Monday morning. The signals to watch are an SEC or FINRA statement on weekend equity trading, a second broker or venue committing to weekend hours, and any word from OCC or DTCC on weekend processing.


Frequently Asked Questions

What did Robinhood announce at HOOD Summit 2026?


Robinhood announced Robinhood Agents, crypto perpetual futures, weekend stock trading, longer options hours and higher intraday margin at its HOOD Summit on September 29, 2026. The agents trade from dedicated accounts with trade approval on by default, and Robinhood says more than 150,000 agentic accounts have opened since May. The perpetuals cover eight coins through Bitstamp with up to 10x leverage on bitcoin and ether, and intraday margin rises to up to 4x buying power for eligible customers.


What did the IRS say about Section 351 ETF conversions?


The IRS ruled in Revenue Ruling 2026-20, released September 28, 2026, that an investor who transfers appreciated securities to a new ETF which then distributes those same securities to an authorized participant has made a taxable exchange, not a tax-free Section 351 transfer. Notice 2026-62, issued alongside it, names other fund strategies Treasury considers potentially abusive, including box spread funds, and asks for comments by October 28, 2026. The notice expresses no view on seeding a new ETF with assets that fit its investment thesis and are intended to stay in the fund.


What are Cboe KPI contracts?


Cboe KPI contracts are planned binary contracts tied to key performance indicators at 23 US-listed companies, to be listed on Cboe's SEC-regulated securities exchange. Cboe announced them on September 30, 2026, with Robinhood as the first retail broker, and expects an October 2026 launch subject to regulatory approval. Neither Cboe nor Robinhood will charge fees on them through the end of 2026.


Is BNY Pershing shutting down Wove?


Yes, BNY Pershing is dismantling Wove as a standalone platform and folding its strongest parts into BNY's wider wealth solutions business, WealthManagement.com reported on September 29, 2026. Wove, a multi-custodial advisor platform launched by Pershing X in 2023, counts TIAA, Sanctuary Wealth and Steward Partners among its known users. Adam Vos, BNY's global head of wealth solutions, is leading the restructuring, and no sunset date has been reported.


Can investment advisers self-custody crypto under the SEC's proposal?


Only in limited circumstances: the SEC's October 1, 2026 proposal would allow registered investment advisers and regulated funds to self-custody crypto assets under certain conditions, which The Block reports means where no permitted custodian exists. The proposal would also let state trust companies act as custodians for adviser and fund crypto holdings. Comments are due 60 days after the proposal is published in the Federal Register.


 
 
 

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