PM Action Group

Pulled from internet.

Both MiFID II and MiFIR entered into force on 2 July 2014. The initial date for implementation by the Member States was 3 January 2017, however, in February 2016 the European Commission delayed this until 3 January 2018 to allow for the building of IT systems to enable enforcement of the new package.

Given how long this regulation has been known about, and the delayed implementation, it seems that starting to look at it in September 2017, just a few months before implementation, maybe too late?

I am not pleased with the late notice regarding the removal of the SM.  Lacking a secondary market, the lack of liquidity is a problem to me, and one which competitors such as Property Partner seem to have overcome. Furthermore, I see little detail on what Property Moose is doing to arrest the most pressing problem the platform faces, which is poor returns, SPV 50 has been vacant for over a year, and has accrued 5000 GBP in debt, a dismal performance. Surely the new 'bespoke strategy' for every property, should have been implemented from the very beginning?
I am currently selling my shares on the SM at a discount and will be voting to exit every property I own shares in on this platform. I hope the exit date on all existing properties can be brought forward significantly, so I will be able to extract myself from Property Moose completely in the next couple of months.

Morning. Just coming back on the latest questions:


My biggest issue is probably the plan to move to the quarterly payments. What is the rational for this move?

We will continue to pay monthly payments on all properties that we have currently. Moving forward, this will move to quarterly for new buy-to-let properties only.

The point here is that it takes roughly a days work to prepare the accounts each month for each SPV. We do this as part of our internal finance team which, of course, is limited by the amount of resource we have available. For some of the properties which receive, say, £400 rental income, paying a third party around £100 a month to do this process would kill the returns for investors so we took the view that it was better to complete the work in-house. There is a cost levied for this service which is less than it costs to deliver the work, again, to help pass on greater returns to investors. Clearly, this model is not sustainable which is why any future projects will be larger in value to justify the costs of operating the SPV structure. 

Moving to quarterly payments means 1/4 of the workload so reduces the costs on the SPV (and therefore increases the returns). It also allows the dividend calculations to be smoothed out across a quarter rather than in a month. Much of the issues regarding SPV debt has come from paying out dividends to investors one month (as we don't want to sit on investors' cash) but then the SPV requiring money to deal with something another month. Building up a provision fund over time (to top up any raised up front) is one option to solve this and would be something we'd look at as part of further member engagement in due course. 

Quarterly payments will make the whole process more efficient and lead to less errors too. When an invoice comes late but relates to a previous month, that creates issues for the accounting that needs to be rectified. Little things like that seem like not a problem but when dealing with large numbers of low level SPVs it adds up to a lot of work and to help us make the improvements that are being asked for, quarterly payments will help us to push on with that. 

More than happy to have a call to discuss this further and hear any suggestions/preferences if you want to get in touch with chloe@propertymoose.co.uk. 

Given how long this regulation has been known about, and the delayed implementation, it seems that starting to look at it in September 2017, just a few months before implementation, maybe too late?

Thank you for copying the comment. To assist with your review, here is a link to the text: eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32014L0065

To allay your concerns, we have known and been reviewing regulatory changes constantly since launching in 2013. As is evident in the industry, the local regulators (ours being the FCA) form their views of how these regulations should be met in different and ever changing ways. Only in the summer of 2017 did the FCA host the major platforms to discuss the impact of MIFID II on secondary markets and no conclusion or guidance was published. There is currently no guidance issued in relation to this topic and platforms are taking their own view on what is and is not acceptable. Coming to that conclusion is one that takes time and costs to liaise with lawyers and barristers who, themselves, are still unable to provide clear views as there has been no formal guidance issued by the FCA. The risk of getting that decision wrong could put the whole platform at risk which is not in the interests of our members or stakeholders so taking the conservative and sensible approach to pause the secondary market is one which we feel is correct.

As I have said previously, we have spent £millions since launching building our technology and bringing it to market. Removing the secondary market impacts our business too and is not something we want to do. I am hopeful it will re-launch in the future but cannot give a firm indication of when that will be. 

Again, very happy to have a call to discuss MIFID II and any other regulatory points if you want to reach out to chloe@propertymoose.co.uk.


Penguin/YesCautious

I am obviously disappointed with your desire to leave the platform but understand that we have let you down. I hope that one day you may feel comfortable to return but, if not, wish you both all the best in your future investing. The comment regarding competitors is one that I am not going to get into but, as above, the views on regulatory impact and risks are individual to firms and the people involved. There is a significant cost and risk each time regulatory change comes in as can be seen by the level of losses in some of our competitors. This is publicly available on Companies House and I presume forms part of the assessment of platform stability. As, hopefully, you can see, we have learnt significantly from the operation of the "low capital/high gross yield" buy-to-let model and further product types that we have successfully launched (development/loans) and intend to now use this opportunity to work with all of our members on how we can turn the platform into something that everyone is happy with. 

Please do be aware that selling property takes time and is down to market conditions and desires. Voting to sell the property and achieving a sale within a couple of months is something that is very unlikely as anyone that has sold a property will appreciate! The aim should be to maximise the value on any sale rather than going for the speed of an auction sale. Although, of course, the decision is down to the investors in that SPV. 

Do get in touch with chloe@propertymoose.co.uk if you want to arrange a call so I can answer any questions you have or if you wish to share any suggestions on improvements. 



  

I would echo that - very much appreciated propertymoose

Edit:

I would just like to add that it is immeasurable the reassurance a presence on forums gives me as an investor & therefore I assume other investors.  While it may be too late for some on this thread (I am pleased to say not including myself), answering constructive questions honestly & promptly can reassure potential investors too; I am a firm believer that you learn more about a company when things go wrong & when analysing a potential investment platform, I seek out the negatives to see how they are handled.

For me, the changes are mainly acceptable:

• Removal of the SM - everyone is sad to see this & wants to see a VERY speedy return, but I am reassured to see platform longevity prioritised over short term pain!  (Will we be getting the zero fee option for the last few weeks?)
• Moving to quarterly payments is OK with me - hopefully the time saved can be used to do more checking & reduce errors?
• The £100 minimum investment isn't a big issue for me; though it may increase money movements (i.e. withdraw £25 rather than leaving it there for the next investment).

A little bit off topic, but when did SPV 83 fully fund?

I'd like to know when to expect our first dividend from this, its also not on the secondary market. Bit of a shame as I would have bought more shares if anybody wanted out before the big switch off.

Thank you for your swift response.

When are we likely to receive our first dividend payment from this SPV? It has been fully funded for some time now?

I have to agree that 13 days notice is crazy.  That said, ask yourself how long would have made you comfortable?  I asked myself & the answer came back how long is my longest minimum term!  So yes 6 or 12 weeks would have been better, but still a wretch for me.  I do wonder had the idea that the SM could disappear been spelt out in a way I understood, would I have invested so much - the answer is yes in some investments, no in others (probably much less in some & less in most).

At least they are trying to help - no fee is a good gesture IMHO.  Personally I thought a 2% fee on loan notes killed SM trade (i.e. on an 8% return, 2% off was too much to find a match).

I do wonder if somewhere else, perhaps a site outside the EU, could facilitate these trades?