Post by hendragon on Sept 9, 2019 10:28:10 GMT
Having seen the new RS Access, Plus, Max and automatic re-investment terms I am struggling to answer several questions.
The most troubling for me is the auto reinvestment with exit fees. This strikes me as almost a Woodford-like situation ie give us your money we will keep it and make it quite expensive and difficult to get back. I would suggest that RS is no longer a p2p lenders but rather an accumulative private capital fund. Ok it is possible to game the system but the auto re-invest should not be the only official position. Having to circumvent it by "devious means" is not acceptable.
Rs rates and markets have been very opaque for as long as I can remember (had an argument with WestonKev about it, miss his contributions to these boards though). It makes me believe that RS should have to apply for a full banking licence. We, the borrowers, will lend to RS who will then re-lend our money on a general level. To my mind there is very little difference between a bank re-lending from deposits and RS re-lending under the new terms (FSCS, risk and returns excepted). The link between individual borrower and individual lender has been severed. My conclusion is that RS would be conducting unregulated banking rather than p2p lending.
I am also curious about the status of unmatched loans as opposed to money in holding accounts in the event of platform failure. It might well be that unmatched loans would not be ring-fenced and end up in the adminstrator's pot rather than be returned directly to investors as I believe should happen from holding accounts.
RS, with its provision fund, was a great innovator. These changes seem to indicate "going native" or perhaps more charitably "mainsteam" in the FS industry. Perhaps I have misunderstood the changes or their intent. Perhaps also I have missed some salient points about the changes. I would welcome constructive comments.
