lexo
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Post by lexo on Aug 14, 2018 21:54:26 GMT
A while ago FS introduced a 1% premium/discount cap for secondary market offers. Probably most investors had time to evaluate whether this move made FS more or less attractive. It would be great if investors could express their opinion in the poll and their reasoning below why this made FS more or less attractive. If many believe this is a bad idea, perhaps FS would reconsider.
Do you think the cap has some benefits to FS?
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sqh
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Post by sqh on Aug 14, 2018 22:18:38 GMT
I believe it was a forumite who was instrumental in introducing the 1% cap. It is typical of some of the ill thought-out posts made by those who like platform bashing.
1% discount was never going to be sufficient reward to keep the SM liquid, but at the time it was introduced, there was very high demand for loans, so it didn't really matter. I think the current demand is the new norm and 2% discount should be introduced.
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rogerthat
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Post by rogerthat on Aug 14, 2018 23:06:49 GMT
I believe it was a forumite who was instrumental in introducing the 1% cap. It is typical of some of the ill thought-out posts made by those who like platform bashing. 1% discount was never going to be sufficient reward to keep the SM liquid, but at the time it was introduced, there was very high demand for loans, so it didn't really matter. I think the current demand is the new norm and 2% discount should be introduced. Totally agree though I wasn't aware any forumites were musicians but its appears to me that its certainly not doing the job it was intended to do as 1%, certainly on smaller amounts is hardly worth the effort. What other rates has it been and what was the reason to reduce it ? (ive only known it as 1%) if it was to stifle the SM then its certainly done a good job
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sqh
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Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Aug 14, 2018 23:35:47 GMT
I believe it was a forumite who was instrumental in introducing the 1% cap. It is typical of some of the ill thought-out posts made by those who like platform bashing. 1% discount was never going to be sufficient reward to keep the SM liquid, but at the time it was introduced, there was very high demand for loans, so it didn't really matter. I think the current demand is the new norm and 2% discount should be introduced. Totally agree though I wasn't aware any forumites were musicians but its appears to me that its certainly not doing the job it was intended to do as 1%, certainly on smaller amounts is hardly worth the effort. What other rates has it been and what was the reason to reduce it ? (ive only known it as 1%) if it was to stifle the SM then its certainly done a good job. It was +4% and -4%. I'm not sure FS officially gave a reason, but I believe this thread was instrumental in making the decision.
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rogerthat
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Post by rogerthat on Aug 14, 2018 23:40:13 GMT
It was +4% and -4%. I'm not sure FS officially gave a reason, but I believe this thread was instrumental in making the decision. Thanks..it became obvious before I got half way through the 1st comment  theres always one !
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Godanubis
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Post by Godanubis on Aug 15, 2018 0:40:52 GMT
It was +4% and -4%. I'm not sure FS officially gave a reason, but I believe this thread was instrumental in making the decision. Thanks..it became obvious before I got half way through the 1st comment theres always one ! Think the reason for cap was to avoid lots money being “exchanged from Main to FISA” for the big investors  . However I agree -2% should be introduced to stimulate SM
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mjc
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Post by mjc on Aug 15, 2018 5:20:34 GMT
With some loans I’d feel happy with 50p in the £. For stability it should go up in small steps, ie 2% to what ever is required to sell anything, perhaps 99%?  |
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TheDriver
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Post by TheDriver on Aug 15, 2018 11:47:40 GMT
The way the tax liability transfers I think the discount needs to increase to stimulate the SM, but only the discount level to at least -5%.
Who's going to pay a premium now, especially in the current situation?
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stev
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Post by stev on Aug 16, 2018 13:13:38 GMT
Thanks..it became obvious before I got half way through the 1st comment theres always one ! Think the reason for cap was to avoid lots money being “exchanged from Main to FISA” for the big investors . However I agree -2% should be introduced to stimulate SM I think transfers from Main to IFISA at -4% were seen as an abuse of the secondary market that might draw the unwelcome attention of HMRC. However, I have noticed transfers on Ablrate going through at -25%.
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lexo
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Post by lexo on Sept 7, 2018 23:37:10 GMT
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mjc
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Post by mjc on Sept 8, 2018 4:26:37 GMT
I think it may well be ‘regulatory’ implications that was instrumental - it would be good to know.
One unintended consequence of ANY cap is that it distorts the “free market valuation” aprop pro the perceived or actual risks of the loan.
i wonder if a system for an alternative market, after the 150 days arbitrary cut-off, for any discount to be offered, but without interest benefit/liability. So those that want rid / agamble on distressed loans can do so with eyes wide open.
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arby
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Post by arby on Sept 8, 2018 8:00:08 GMT
1% max discount is typically 1 month's interest. So after a month it is impossible to sell a loan part without making a profit. This doesn't make sense to me. Perhaps the max allowable discount should increase as the loan ages so that at worst you break even, i.e. 1% at 1 month, 2% at 2 months etc.
I'm quite happy with a 1% limit on the premium applied to the loan; the primary impact of increasing it would just be an even bigger slice of new attractive loans being snapped up by big players and sold on for a quick profit.
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rs
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Post by rs on Sept 8, 2018 9:46:51 GMT
I’m happy with 1% SM discount premium as this is relatively fair for all parties involved. Also with the new FCA proposals I’m not sure increasing SM discount premium rate will be helpful for FS.
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number5
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Post by number5 on Sept 8, 2018 10:32:23 GMT
I’m happy with 1% SM discount premium as this is relatively fair for all parties involved. Also with the new FCA proposals I’m not sure increasing SM discount premium rate will be helpful for FS. What are the new FCA proposals and how would these have an impact on FS SM discount premiun?
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TheDriver
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Post by TheDriver on Sept 9, 2018 2:43:30 GMT
Hi lexo ; Is the thread title intended to be "FS" in place of "is"? Would seem to make a lot more sense! HtH
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theres always one !
. However I agree -2% should be introduced to stimulate SM