Square Inc-owned Cash App said on Tuesday its clearing broker lifted restrictions on buying stocks of AMC Entertainment and Nokia Oyj's through the mobile payment platform, just hours after placing the temporary curbs. (https://bit.ly/2NVOHLT)
Cash App's halt came on the heels of online brokerage Robinhood placing similar constraints on shares of some companies, as clearinghouse deposit requirements tied to trading volumes jumped and strained its finances. Robinhood on Monday tapped almost $3.4 billion in emergency funding from existing investors to manage the problem.
Cash App said on Tuesday central clearinghouse DTC increased capital requirements on Axos, the clearing broker used by the app, by more than 250%. (https://bit.ly/3cD9RJ1)
The app allows users to buy and sell both stocks and Bitcoin, while also providing money transfer services.
Clearing brokers are required to provide funds in the form of deposits to support trading, but Axos has not provided the necessary additional capital, restricting buying of shares of AMC and Nokia, the company said.
(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Shinjini Ganguli and Ramakrishnan M.)
