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Post by MoneyThing on Jan 30, 2017 20:04:51 GMT
....whereby we might need to revisit the pre-funding option. I appreciate that this has been discussed at length on various threads over the nearly two years we have been operating, however I would really appreciate your input again to try and assist us Things in designing a system that it is equitable to all lenders as possible. The reality is that it has got the point where we need to remove the 4pm surge and whilst I know that many of you enjoy the FFF...the system clearly does not enjoy it so much. (Indeed, If there is the consensus that lenders would rather we keep the current model than we will gladly focus our efforts on improving the existing code/db/hosting/etc.) We are really open to any ideas as to the best design so please feel free to contribute...(please). As and when ideas crystalise, I will add them to this top post to keep it all together. Many thanks in advance, Ed
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Post by bracknellboy on Jan 30, 2017 20:10:42 GMT
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Post by mrclondon on Jan 30, 2017 20:29:01 GMT
MoneyThing - are you aware of any constraints the FCA's client money handling regulations will impose on a solution ? (presuming you still have open lines of communication with SS, it might be worth seeing what their thoughts on this aspect are). At present the two obvious platforms with solutions to this are SS and AC. The fundamental difference between them is the platform's differing interpretation of the client money rules. Pre-orders on AC need cleared funds to fulfil, SS creates a temporary debit balance on the account if there are insufficeint funds to fulfil the pre-order (and allows 48 hours for the debit balance to be cleared). Out of the two, I prefer AC's implementation as the pre-order functionality extends to secondary market purchases as well as primary market funding of new loans.
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mason
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Post by mason on Jan 30, 2017 20:34:42 GMT
One good option was already proposed by james yesterday: A second day is good but it does seem that asking people to give minimum and maximum desired amounts then fill bottom up would better address this. A Pound each round robin until the money runs out then add back to the pot any money from those whose minimums weren't reached. Continue this until the loan is full or no more demand left. Should allocate as evenly as possible without any time crunch at all. Some programming edge cases to deal with but nothing troublesome. One would be random selection of which person whose minimum wasn't reached gets cancelled first. That could free enough for the next person with the same minimum to reach it. Another is random ordering of people so some don't consistently get a little more just by being first. I'm not sure how useful the minimum desired amount would be. I don't think I'd use it personally, but perhaps some would rather not be in a loan unless they have a decent slice.
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mason
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Post by mason on Jan 30, 2017 20:37:36 GMT
Perhaps. I voted for the status quo in that poll, but given the strain on the site today (and assuming future loans will be subject to the same problem) I'd probably vote differently if the poll were repeated.
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Post by bracknellboy on Jan 30, 2017 20:38:09 GMT
My opening penny's worth. Important to consider platform operation "in the round", not just point aspects. There are several side effects/consequences of the current system. Firstly being at a set time is good for planning / remembering (cue all the people saying they can't make that time....but.....); that consideration would be immaterial if "pre-funding" came in however. But a side effect is ability to predict and take advantage of significantly greater availability on the SM in the run up. Given current demand, removing the fixed date/time will impact that, and unless some corresponding change is made to the way the SM operates could well (likely?) make it near on impossible for mere mortals to pick up on the SM and make it the exclusive preserve of those with bots. Perhaps only a full AC like set and forget PM/SM system would deal with that.
I did wonder whether the speed at which this flew off the shelf was perhaps an indicator that perhaps quite a number of "people" were actually operating with multiple accounts, and perhaps using some automation to buy from all those accounts. I've been a fan of MT adopting KISS, and i think that appropriate bid limits designed to extend beyond 24 hours is a good way to do that. However, there has been a failure of late to achieve that. Only you guys can know whether there is some arms race with people with multiple accounts causing a misjudgement on the setting of max value. Clearly if people had more confidence that the auction would last it would reduce the need for peak server load.
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james
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Post by james on Jan 30, 2017 20:38:52 GMT
Ask for the desired minimum and maximum and allocate a Pound round robin until all available loan amount is filled. Note those whose minimum wasn't met, put their allocation back into the pot and continue filling. If loans is fully subscribed, job done. If still some left can offer it to those who didn't get their minimum.
Need to pre-fund with money in your account else maximum is capped at what you have.
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jonah
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Post by jonah on Jan 30, 2017 20:41:22 GMT
Out of the two, I prefer AC's implementation as the pre-order functionality extends to secondary market purchases as well as primary market funding of new loans. I agree, the 'set and forget ' from AC is head and shoulders above most other options imo. I would stick with the £1 minimum unit to reduce shrapnel issues. The 'bottom up filling' approach used at SS and AC would seem logical. if you are doing prefunding only and not tweaking the SM then I would still go for a bottom up, 'pick your target' approach. Given your 24hr notice style the load should be much reduced, but an email stating the allocation could reduce further the 4pm spike from people checking what they got. I would assume you aren't going to introduce SS style 'invest no pay later'. Given the speed of transfers on MT, I don't see any real need.
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Post by marcusponds on Jan 30, 2017 20:41:31 GMT
Suggestions 1 (perhaps obvious) PF would apply to new loans only, not renewals or sales.
2. Bidders have say, 24 hours say how much they want of a new loan and (i) if sum of all bids add up to less than the loan at the time of release, they all get what they wanted (assuming their accounts contain the requisite cleared funds). if not it gets complicated!! I was going to say all bidders get the same (= loan amount/number of bidders, but then there's the issue of some bidders not wanting that much). Hmm
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james
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Post by james on Jan 30, 2017 20:44:35 GMT
One good option was already proposed by james earlier today: A second day is good but it does seem that asking people to give minimum and maximum desired amounts then fill bottom up would better address this. A Pound each round robin until the money runs out then add back to the pot any money from those whose minimums weren't reached. Continue this until the loan is full or no more demand left. Should allocate as evenly as possible without any time crunch at all. Some programming edge cases to deal with but nothing troublesome. One would be random selection of which person whose minimum wasn't reached gets cancelled first. That could free enough for the next person with the same minimum to reach it. Another is random ordering of people so some don't consistently get a little more just by being first. I'm not sure how useful the minimum desired amount would be. I don't think I'd use it personally, but perhaps some would rather not be in a loan unless they have a decent slice. The minimum is there because some people have expressed a desire to avoid shrapnel, but with varying definitions of what amount is low enough to qualify. It's easy to design this constraint in and that means they don't have to sell and the money gets evenly allocated instead of fast fingers or bots reward on the secondary market.
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dovap
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Post by dovap on Jan 30, 2017 20:45:18 GMT
keep it simple as it is now but look again at bid limits. Look at the use of bots on site - and stop/reduce their effectiveness (likewise multiple linked accounts)
please don't turn into some sort of SS-like effort
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seeingred
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Post by seeingred on Jan 30, 2017 20:45:57 GMT
Overall I prefer the SS model with prefund and a negative balance allowed - if only for 24 hours.
MT are very quick to accept payments into accounts, but the 4pm opening time has proven inconvenient for me on occasions. On today's loan getting back even an hour after 4pm would have been too late.
So I'd go for a bottom up prefund as SS. If anything is left over, put it on the SM for another 24 hours and do bottom up again. This gives everyone a fair chance with new loans, thereafter they can be at the mercy of the FFF syndrome.
Comforting to see a MT loan that is not connected to an existing borrower by the way. Keep it up MT.
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star dust
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Post by star dust on Jan 30, 2017 20:54:59 GMT
How about some kind of hybrid - pre-fund up to an amount which varies with each loan, say 0.25% (or something like that determined in much the way you do the bid limit at present) - FFF remainder at fixed time later that day. Pre fund to be set over 24hr period, after notification goes out, amounts need to be in account by fixed time before go-live. Bottom up fill.
There may be times (like today) when there is none left over, or no one gets all they want, but there will undoubtedly be others (like on further tranches) where there is more left.
Obviously you have the stats and know your business capacity, so there may be very sound reasons why this suggestion may not work, or may not give enough investors the amounts they are looking for, just an idea for starters.
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james
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Post by james on Jan 30, 2017 20:57:20 GMT
The invest now, pay later and prefunding issues can largely be addressed in the scheme I described just by MoneyThing running a mock allocation every hour and telling people their current allocation. That will gradually fall but it'll cap the need to pay in or sell a lot more than you eventually get by giving you that upper limit. This also gives those whose minimum won't be met a chance to have second thoughts and lower it.
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Post by MoneyThing on Jan 30, 2017 20:58:09 GMT
MoneyThing - are you aware of any constraints the FCA's client money handling regulations will impose on a solution ? (presuming you still have open lines of communication with SS, it might be worth seeing what their thoughts on this aspect are). At present the two obvious platforms with solutions to this are SS and AC. The fundamental difference between them is the platform's differing interpretation of the client money rules. Pre-orders on AC need cleared funds to fulfil, SS creates a temporary debit balance on the account if there are insufficeint funds to fulfil the pre-order (and allows 48 hours for the debit balance to be cleared). Out of the two, I prefer AC's implementation as the pre-order functionality extends to secondary market purchases as well as primary market funding of new loans. Acknowledged - thanks. I would just state that we would only continue on a 'cleared funds basis' regardless of what system we introduce. Regards, Ed.
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