I love some good terms and conditions so I decided to dive in. I didn’t know who Public was until I saw they were originally Matador (as @meta pointed out, heavy eToro inspiration there.)
Like eToro they have a focus on sharing your position and trades within their community, with eToro entering the states I can see why they have made a sudden shift in name and position.
Onto the juicy disclosures to figure out how this all works. As always not all of their terms have been fully updated, some still refer to the old trading name of Matador.
Starting off with the interest rate, 2.5% looks great which means I’m keen to know how they promise this. Looking through the interest terms and there isn’t anything stand out, it all looks pretty boiler plate.
But how does it really work? Well the terms and conditions clears that up for us.
Point 22 goes into more detail about the interest rate, as expected they are not obligated to pay you anything and it will change over time (you see something similar in agreements here in the UK.) Interestingly they aren’t using foreign banks where they can generate higher interest but money market funds to generate the return.
You’ll also see mention of a new name, APEX. This is the true custodian and back office doing the heavily lifting. If you aren’t paying for trades how are they making the money? We all know about front running with Robinhood but you need decent scale for that to work. Plus with day trading limits it can be harder to cover your costs with this alone.
Onto the next agreement, stock lending.
I’m loving these file names as well. As expected it’s a pretty standard stock lending agreement, however it is worded as if the end customer will be paid for being part of the program. It’s not clear how the revenue is being split between APEX, T3 (Public’s company name), and the customer.
There is a lot to unpack and the rules are very different in the US versus the UK so it would take me longer to figure out what is different.
Interesting point on protection, your loaned stocks aren’t covered by our equivalent of FSCS. Seems like a customer should be more aware they are being enrolled into this program and what it is costing them.
Finally, these guys offer margin accounts as well. I remember this from the Matador days so that hasn’t changed.
The fees section seems extremely light given all the extra stuff they seem to be offering behind the scenes.
I’m surprised they have a footnote that says it’s the customers responsibility to check if they are being charge additional fees?
Some products and services may require additional fees or transaction minimums not specifically listed here. Prior to placing a trade or requesting any services, it is the customer’s responsibility to ask T3 Securities Inc. if any additional fees will apply.
That is very unexpected but I don’t know what is and isn’t acceptable for US brokers.
An extra point that got my attention, they get their data from from BATS
Which is now known as Cboe as they were acquired. Interesting as BATS went through a period in the UK of heavily pushing some new indexes which was an “almost” copy of the FTSE 100, 250, and all-share, just without any of the licence costs. Glad I never agreed to pick those indexes up after all!
Looking at the file names it seems this relaunch is very new. There seems to be a lot of information missing from the site and promises that it’s all in the app. For now I can’t say what is and isn’t present.
Best of luck to them!