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Post by chris on Sept 19, 2014 16:34:36 GMT
chris Oops, I meant bank transfer. My comments are going to need attention immediately, as I have had a email asking for my Shadbid on W-London Prop to be settled for "early next week". What happens if it draws on Monday? Money I transfer now won't appear in my account until Tuesday, so I am already facing a shadfault! Many others who get home from work tonight will be in the same situation. I will raise this internally, but would suggest anyone transferring the cash on Monday so that it's cleared on Tuesday would be okay.
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oldgrumpy
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Post by oldgrumpy on Sept 19, 2014 16:41:44 GMT
Good. I'm transferring cash this evening; that still won't arrive in the client account until Monday >>> my account Tuesday. Bank computer systems doing "faster payment" need the weekend off, it seems, which partly negates their usefulness! PS Have a nice weekend!  |
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pikestaff
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Post by pikestaff on Sept 19, 2014 16:58:16 GMT
We were told that AC would have a system for dealing with shadow bids post GoCardless, and I would have expected this to have been sorted and advised to us. I have no problem with settling a shadow bid within 12-16 hours of receiving notice to do (usually much quicker). However, banking delays are outside my control.
AC needs to either
(i) ensure it always gives shadow bidders enough notice to allow for those delays (which is what I was expecting to happen), or
(ii) have alternative funding arrangements for the short period until cleared funds are received.
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Post by mrclondon on Sept 19, 2014 18:34:29 GMT
The removal of GoCardless was inevitable, and lets not forget SS removed it a couple of months ago. More notice would have been appreciated but the reasoning is sound enough.
The most concerning aspect of this thread is the realisation that debit cards when/if AC get bank approval for them will not provide an instant funding option. At face value debit cards will be a waste of time.
The second aspect of concern is AC are clearly going to operate by the rule book. Which is good at one level, but places them at a competitive disadavantage unless all competitors fall into line in short order. Where this leaves TC who operate a similair on trust funding system to SS is anyone's guess. Not to mention RS's instant debit card funding which went fee free recently for larger amounts to try to de-spike the rates, or indeed FC's instant debit card funding.
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Post by chris on Sept 19, 2014 20:16:50 GMT
The removal of GoCardless was inevitable, and lets not forget SS removed it a couple of months ago. More notice would have been appreciated but the reasoning is sound enough. The most concerning aspect of this thread is the realisation that debit cards when/if AC get bank approval for them will not provide an instant funding option. At face value debit cards will be a waste of time. The second aspect of concern is AC are clearly going to operate by the rule book. Which is good at one level, but places them at a competitive disadavantage unless all competitors fall into line in short order. Where this leaves TC who operate a similair on trust funding system to SS is anyone's guess. Not to mention RS's instant debit card funding which went fee free recently for larger amounts to try to de-spike the rates, or indeed FC's instant debit card funding. If the platform has deep enough pockets they can fund the instant transfer themselves, although even that isn't entirely straight forward. In the very short term that's not an option for us but we have options down the road that we're working toward. There's some platform changes coming that will mitigate the effects to a degree as well.
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mikes1531
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Post by mikes1531 on Sept 20, 2014 4:08:19 GMT
I should clarify. The client money regulations brought in by the FCA effectively require 100% cleared funds in the designated client money account before those funds can be made available on the site. ... Saving Stream's solution is a breach of those same rules. We aren't allowed to give instant deposits for any of those solutions unless we find a way of having cleared funds available. For example we can prefund the account each morning with our own cash but then we have to sweep out the balance each night to make sure that the closing balance reconciles perfectly with lender deposits that are held. With the amounts that are deposited that isn't practical for us, although it may be an option for some sites that are either much smaller or have deeper pockets. : Unless you have some info to back up your statement, you may wish to retract your comment about savingstream being in breach of the new rules. Especially as you seem to explain in your next paragraph how a platform with sufficient working capital could operate such a scheme within the rules. Perhaps what AC need is a loan to cover their working capital needs!  Or some cooperative underwriters.
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Post by chris on Sept 20, 2014 5:30:47 GMT
I should clarify. The client money regulations brought in by the FCA effectively require 100% cleared funds in the designated client money account before those funds can be made available on the site. ... Saving Stream's solution is a breach of those same rules. We aren't allowed to give instant deposits for any of those solutions unless we find a way of having cleared funds available. For example we can prefund the account each morning with our own cash but then we have to sweep out the balance each night to make sure that the closing balance reconciles perfectly with lender deposits that are held. With the amounts that are deposited that isn't practical for us, although it may be an option for some sites that are either much smaller or have deeper pockets. : Unless you have some info to back up your statement, you may wish to retract your comment about savingstream being in breach of the new rules. Especially as you seem to explain in your next paragraph how a platform with sufficient working capital could operate such a scheme within the rules. Perhaps what AC need is a loan to cover their working capital needs! Or some cooperative underwriters. I should have been explicit that I was referring to Saving Stream's solution in the context of implementing it for our site. Yes it could be made to work if you have deep pockets. At our current size we'd need around £1m set aside that we could shuffle in part between our bank account and the client money account each day for us to implement their style of system. If that money didn't need to be sat in our account then it would be easy for us to cover, but that's not our interpretation of the regulations. The money has to be physically cleared into the CMA before it can be used on the platform. With the wider changes coming with the new platform that doesn't make as much sense for us.
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spockie
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Post by spockie on Sept 20, 2014 7:26:01 GMT
Could you not have hung onto Gocardless for two more weeks until the site launch?
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Post by chris on Sept 20, 2014 8:24:53 GMT
Could you not have hung onto Gocardless for two more weeks until the site launch? Only by delaying payments for up to 6 days. We couldn't comply with the regulations and keep it as an instant transfer.
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shimself
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Post by shimself on Sept 20, 2014 9:23:06 GMT
Beat me to it. Any reason Assetz cant do something similiar chris? Effectively a 72hr shadow account. The new rules effectively prohibit it unfortunately. Edit: I should clarify. The client money regulations brought in by the FCA effectively require 100% cleared funds in the designated client money account before those funds can be made available on the site. ..... Who can we write to at the FCA to explain to them why they should rethink? Actually who can we invite from the FCA to participate here (in true ask-the-people spirit) before coming up with rules that don't help?
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shimself
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Post by shimself on Sept 20, 2014 9:28:43 GMT
I signed up for shadow bids a few weks ago.
The first I knew that you wanted the cash was when I scrolled down my account page and found a message (don't you send emails?)
And you asked me to send cash to settle a shadow bid where the loan hasn't even filled yet. I thought the whoe idea was not to tie cas up on potentially unsuccesful loan requests (or is it this the FCA cleared funds regulation scuppering the shadow bid concept ?)
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Post by chris on Sept 20, 2014 9:38:47 GMT
Who can we write to at the FCA to explain to them why they should rethink? Actually who can we invite from the FCA to participate here (in true ask-the-people spirit) before coming up with rules that don't help? Thing is from a regulators point of view the new rules make perfect sense. They're specifically to stop a situation where in the event of a platform failure or 3rd party clearing system failure that causes the client money account to be frozen, that lender's funds are protected. Let's take an example without insisting on cleared funds. A loan is posted on our site, lender A deposits cash via GoCardless, and they then use that cash to buy a loan unit from lender B. If lender B then withdraws the cash released from that sale before lender A's cash clears then at that point in time technically it isn't lender A's cash that's being withdrawn from the site. If the account is frozen or there is a chargeback on the GoCardless transaction then in effect those funds will have come from other lender's allocated cash. The FCA's rules are trying to protect against that shortfall to make sure that lender's funds are always correctly allocated, segregated, and looked after. There are various ideas for working around this that I'm sure all the platforms will be working on, but as I understand it there's no way to know which of those ideas and systems will be acceptable to the FCA until after they question it, complain, or worse. As such we've gone for a by the book interpretation now, will be making changes within 2 weeks to address the workflow of the site to minimise the pain for lenders, and have mid term plans to add new methods of depositing cash with much faster clearance.
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Post by chris on Sept 20, 2014 9:39:57 GMT
I signed up for shadow bids a few weks ago. The first I knew that you wanted the cash was when I scrolled down my account page and found a message (don't you send emails?) And you asked me to send cash to settle a shadow bid where the loan hasn't even filled yet. I thought the whoe idea was not to tie cas up on potentially unsuccesful loan requests (or is it this the FCA cleared funds regulation scuppering the shadow bid concept ?) The site doesn't know when a loan will be drawing down. It just lists unsettled shadow bids. You get an email from the site when the admin team require you to settle specific shadow bids.
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Post by westcountryfunder on Sept 20, 2014 10:12:03 GMT
In this context is there a FCA definition anywhere of what is meant by "cleared funds"? It is not as obvious as may be thought.
A good many years ago, as a manager at a clearing bank, I was aware of the distinction drawn on the one hand between a cheque which had 'cleared' in the sense that there was no longer any possibility of it being returned unpaid under the rules of the clearing house, and on the other hand the timescale as to when the cheque was 'cleared' for interest purposes. The former was generally considered to be 3 working days (some banks insisted on 4 or more), whereas the latter was 2 working days i.e. a cheque paid in on day 1 was cleared for interest and value purposes on day 3, but only safe to pay out against on day 4 at the earliest. As far as I know this remains the same today, but I am sure someone will correct me if things have changed.
Cheques are unlikely to be relevant for our current purposes, but direct debits (DD) had much in common. The clearing times for interest purposes mentioned above were the same for direct debits, and the possibility of a DD bouncing was similar to a cheque. This may be different now with electronic systems.
However, it seems to me that a debit CARD (DC) transaction is quite different. With HSBC's online banking they quite often irritate me by declining a transaction which I originate on FC. They particularly don't like it if I try more than one such transaction per day. But usually the transaction is authorised and I can see immediately on online banking that the funds have been notionally deducted from my account, although my account is not actually debited until the following working day (at the earliest). So the funds are earmarked immediately - cleared in effect - they are not going to 'bounce', but exchange of value does not take place until the next day.
If the FCA insists on clearance for value purpose then I cannot for the life of me understand why, but I daresay they have not taken the trouble to explain their thinking. I certainly can see nothing wrong with DC transactions.
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oldgrumpy
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Post by oldgrumpy on Sept 20, 2014 10:15:11 GMT
I've done my bank transfer to cover W. London Prop.
It will arrive in the client account Monday, then my account Tuesday, as will a lot of funds called in by AC's email Friday pm.
As I see it, you cannot allow drawdown before Tuesday, when all those funds are actually in our "available to invest" accounts.
Clearly AC knows this: what needs to be sharpened up is that day's delay. If we can get funds into the client account in around two hours or less by "faster payment", automatic allocation to our lending account should be equally fast (or even run every half hour, or quicker), not left until the next day. The client account bank should be capable of facilitating this. Why doesn't it?
I suppose all this will not be a problem if at least two working days notice is given to settle shadow bids, which is usually the case. Telling us Friday pm that WLProp might drawdown Monday wasn't.
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Or some cooperative underwriters.
