Wind-down plans

carrdelling

Posts: 17
Likes: 5

Wind-down plans Dec 9, 2019 20:15:27 GMT

Quote

Post by carrdelling on Dec 9, 2019 20:15:27 GMT

Just received a new e-mail from RateSetter, "Notice of changes and new P2P rules", with a few interesting surprises such as the new Wind-down plans:

(link to PDF with the rules here)

www.ratesetter.com/globalassets/fca/12-2019-wind-down-plans.pdf?tsr=Email&tcm=Changes-to-Investor-Terms-RS&tcr=9thDec&utm_source=CRM&utm_medium=Email&utm_campaign=NOV_8th_Jan

Which, in my humble opinion, look a bit scary

Did RateSetter communicated this change in advance through any other channels? Has anyone heard about something similar happening in other platforms? What is the real risk we have here with these new rules in place?

travolta Member of DD Central Posts: 1,458 Likes: 1,167	Wind-down plans Dec 9, 2019 20:35:55 GMT Quote Select Post Deselect Post Link to Post Back to Top Post by travolta on Dec 9, 2019 20:35:55 GMT Beginningof THE END , again...?
	Last Edit: Dec 9, 2019 20:36:09 GMT by travolta

Stonk

Stonking

Posts: 735

Likes: 658

Wind-down plans Dec 9, 2019 20:37:13 GMT macq likes this

Quote

Post by Stonk on Dec 9, 2019 20:37:13 GMT

They have mentioned wind-down plans rather vaguely in the past (as in: "they exist") without mentioning what they would cost. This is the first time I've seen any concrete idea of the cost of winding down.

The winding down scenario would cost lenders 2% annually of their loaned balance for the duration. It actually says up to a cap of 2%, but I think we can guess, given the possibility, what they would choose to charge!

I'm pleased that this has been quantified, and pleased that it is not too high a figure. It might cut one's interest in half or thereabouts, but will not result in a capital loss.

However, winding down (i.e., closing to new business and exiting in an orderly manner) is very different from collapsing and going into administration. The latter is much more of an unknown, and would undoubtedly be considerably more painful.

macq
Member of DD Central

Posts: 1,924

Likes: 1,192

Wind-down plans Dec 9, 2019 22:20:53 GMT

Quote

Post by macq on Dec 9, 2019 22:20:53 GMT

Not sure in this case it is as bad as it looks as in someways at least they have said how they are paying for a wind down if it happens,rather then some platforms saying there's a plan when most are still not making a profit or probably setting aside enough for a run off.In the end it would probably be a cut in return so done in a different way but with the same result as someone has to pay (and its nearly always us the lender).As loans repay the money any platform makes would be dropping but would still require staff etc its just another one of the hard truths of p2p that are coming out and at the end of the day with a total lack of confidence in the market,new regs and media reports knocking the product nearly every week (and even on here) its hard to see where growth will come from now.

Post by carrdelling on Dec 9, 2019 20:15:27 GMT

Post by travolta on Dec 9, 2019 20:35:55 GMT

Post by Stonk on Dec 9, 2019 20:37:13 GMT

Post by macq on Dec 9, 2019 22:20:53 GMT