corto
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Post by corto on Nov 28, 2019 15:04:06 GMT
To my knowledge swept money cannot be moved anywhere other than the cash account of the standard or ISA account it is located in. For example, you cannot directly invest swept money hold in a QAA into 30d without first transferring it to the cash account. Given the QAA is very liquid currently it does not make a difference now (and may even be seen a minor nuisance). However, in case of stress it can make a big difference.
Regarding suspended loans. I seem to remember (but can't find the post) that Stuart once wrote that suspended loans are fully covered by ring-fenced money.
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littleoldlady
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Post by littleoldlady on Nov 28, 2019 16:16:07 GMT
Regarding suspended loans. I seem to remember (but can't find the post) that Stuart once wrote that suspended loans are fully covered by ring-fenced money. That would be nice, but I don't see how it's possible. Where would the money come from - earning no interest?
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bg
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Post by bg on Nov 28, 2019 16:38:43 GMT
Regarding suspended loans. I seem to remember (but can't find the post) that Stuart once wrote that suspended loans are fully covered by ring-fenced money. That would be nice, but I don't see how it's possible. Where would the money come from - earning no interest? The expected losses of all suspended and live loans are fully covered by the provision fund.
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corto
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Post by corto on Nov 28, 2019 16:40:07 GMT
Regarding suspended loans. I seem to remember (but can't find the post) that Stuart once wrote that suspended loans are fully covered by ring-fenced money. That would be nice, but I don't see how it's possible. Where would the money come from - earning no interest? I am referring to the black box accounts, of course. The MLA is everybody's own business. Isn't this basically what the PF promises? That if everything else fails, the PF will cover the capital (if possible)? With a 10% cash buffer currently, that shouldn't be too much of a problem. However, this mixes up two things: possibly ring-fenced funds for suspended loans and the availability of liquid funds to satisfy customer demands for more or less quick repayments (1, 30, or 90 days). At the moment I suspect this is all in the same pot, at least that's how it looks.
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littleoldlady
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Post by littleoldlady on Nov 28, 2019 18:04:42 GMT
That would be nice, but I don't see how it's possible. Where would the money come from - earning no interest? The expected losses of all suspended and live loans are fully covered by the provision fund. Depends on how optimistic your expectation is. Certainly all suspended loans are not covered in full by the PF so it all depends on the percentage recovery on defaulting loans and we have seen plenty of zero recoveries on other platforms, which I suppose did not expect that. If asset valuations were realistic and loans limited to 70% there would be no need for a PF. Trouble is a valuation based on benign conditions will not apply in a fire sale.
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Post by valueinvestor123 on Nov 28, 2019 18:43:09 GMT
I realise there is a float. However even a float is still somebody's cash. My question is simply aimed at trying to understand how it is decided whose cash is going to replace the cash that is in the suspended loans (taken out by an investor from the cash account). Say you are a new investor and just put money into the QAA/Cash (wept into qaa): would you want to know whether your cash is going into suspended loans or would you rather just leave it to the algorithms? Doesn't it become more like a musical chairs kind of game? It does seem a bit bizarre, everyone is invested equally in some suspended loans, but anyone can take their money out with no loss passing a bigger share of the suspended loans to the rest of the lenders. At the end of the day who does take the loss when the suspended loan becomes a default (if it ever does)? Yes, that’s the bit that never made (and still doesn't) make sense to me but I am glad that Assetz are still going strong. The other bit is the internal management of client funds within the automated accounts. It always bothered me that the same company that gets the news on any loan first, is also in charge of investors’ money distributions. Although with the other automated accounts now gone, it should become a little more transparent how funds are distributed (and who gets priority, if any etc). Whether the low rate of the QAA reflects the true risk is still debatable though IMO... It would be interesting to know how the QAA money would be handled in case of administration by the appointed body. Because it might be a bit of a mess. Anyway...I hope the best p2p companies will come out strong the other side.
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Post by stuartassetzcapital on Dec 9, 2019 12:56:12 GMT
I really want to make use of the access accounts because I have big losses on other platforms that can be offset against any new p2p interest I get thus giving me up to 5.75% tax free! But one confusion I have is that I thought that the FCA said that platforms should ensure lenders buy and sell at a true price and while externally the access accounts offer good returns, internally they are allowing lenders to trade distressed loans at full value. Can anyone offer me any reassurances how this can be argued to be correct? I was hoping there would a change around now addressing this but I haven’t seen anything so far. Hi Paul There has been no change to the operation of the Access Accounts following the new regulations as none was required. Expected losses on problem loans have provision fund cash ringfenced to cover that full expected loss so trading can carry on with no detriment. Its all explained on the website. Hope that helps.
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jlend
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Post by jlend on Dec 9, 2019 13:22:21 GMT
I really want to make use of the access accounts because I have big losses on other platforms that can be offset against any new p2p interest I get thus giving me up to 5.75% tax free! But one confusion I have is that I thought that the FCA said that platforms should ensure lenders buy and sell at a true price and while externally the access accounts offer good returns, internally they are allowing lenders to trade distressed loans at full value. Can anyone offer me any reassurances how this can be argued to be correct? I was hoping there would a change around now addressing this but I haven’t seen anything so far. Hi Paul There has been no change to the operation of the Access Accounts following the new regulations as none was required. Expected losses on problem loans have provision fund cash ringfenced to cover that full expected loss so trading can carry on with no detriment. Its all explained on the website. Hope that helps. Hi stuartassetzcapitalInteresting to see the new net PF figures after ring fencing in the access accounts. QAA PF Last update before ring fence at 30 Sept 1.78m After ring fencing at 30 Nov 1.16m 30DAA PF Last update before ring fence at 30 Sept 2.2m After ring fencing at 30 Nov 1.3m 90DAA PF Last update before ring fence at 30 Sept .346m After ring fencing at 30 Nov 0.49m The 30 Sept 30DAA and QAA figures are after some excess was removed I believe. The 30DAA PF was as high as 2.5m in the past but it looks like some money was removed. Am struggling to understand how the 90DAA figure is so high after ring fencing when the Sept figure is lower?
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Post by stuartassetzcapital on Dec 9, 2019 13:48:10 GMT
Hi Paul There has been no change to the operation of the Access Accounts following the new regulations as none was required. Expected losses on problem loans have provision fund cash ringfenced to cover that full expected loss so trading can carry on with no detriment. Its all explained on the website. Hope that helps. Hi stuartassetzcapital Interesting to see the new net PF figures after ring fencing in the access accounts. QAA PF Last update before ring fence at 30 Sept 1.78m After ring fencing at 30 Nov 1.16m 30DAA PF Last update before ring fence at 30 Sept 2.2m After ring fencing at 30 Nov 1.3m 90DAA PF Last update before ring fence at 30 Sept .346m After ring fencing at 30 Nov 0.49m The 30 Sept 30DAA and QAA figures are after some excess was removed I believe. The 30DAA PF was as high as 2.5m in the past but it looks like some money was removed. Am struggling to understand how the 90DAA figure is so high after ring fencing when the Sept figure is lower? PF balances may well have accrued to people's portfolios in say the QAA and if they moved their investment to 90DAA this may have created growth in that account. In the end the £ figures are correct post ringfencing and there are clearly also large ringfenced cash balances on top of those - both protect the loan portfolio in those accounts but only the non-ringfenced balances can be quoted as PF cash under the regulations.
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jlend
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Post by jlend on Dec 9, 2019 14:06:31 GMT
Hi stuartassetzcapital Interesting to see the new net PF figures after ring fencing in the access accounts. QAA PF Last update before ring fence at 30 Sept 1.78m After ring fencing at 30 Nov 1.16m 30DAA PF Last update before ring fence at 30 Sept 2.2m After ring fencing at 30 Nov 1.3m 90DAA PF Last update before ring fence at 30 Sept .346m After ring fencing at 30 Nov 0.49m The 30 Sept 30DAA and QAA figures are after some excess was removed I believe. The 30DAA PF was as high as 2.5m in the past but it looks like some money was removed. Am struggling to understand how the 90DAA figure is so high after ring fencing when the Sept figure is lower? PF balances may well have accrued to people's portfolios in say the QAA and if they moved their investment to 90DAA this may have created growth in that account. In the end the £ figures are correct post ringfencing and there are clearly also large ringfenced cash balances on top of those - both protect the loan portfolio in those accounts but only the non-ringfenced balances can be quoted as PF cash under the regulations. thanks On the page you display both the total PF cash balance and the non ring fenced PF cash balance Can we deduce the ring fenced amount from the difference? Will you be updating the total PF cash balance?
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jlend
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Post by jlend on Dec 9, 2019 14:11:55 GMT
Hi stuartassetzcapital Interesting to see the new net PF figures after ring fencing in the access accounts. QAA PF Last update before ring fence at 30 Sept 1.78m After ring fencing at 30 Nov 1.16m 30DAA PF Last update before ring fence at 30 Sept 2.2m After ring fencing at 30 Nov 1.3m 90DAA PF Last update before ring fence at 30 Sept .346m After ring fencing at 30 Nov 0.49m The 30 Sept 30DAA and QAA figures are after some excess was removed I believe. The 30DAA PF was as high as 2.5m in the past but it looks like some money was removed. Am struggling to understand how the 90DAA figure is so high after ring fencing when the Sept figure is lower? PF balances may well have accrued to people's portfolios in say the QAA and if they moved their investment to 90DAA this may have created growth in that account. In the end the £ figures are correct post ringfencing and there are clearly also large ringfenced cash balances on top of those - both protect the loan portfolio in those accounts but only the non-ringfenced balances can be quoted as PF cash under the regulations. Thanks stuartassetzcapital OK so the PF money moves from the QAA and 30DAA to the 90DAA when any any cash moves from the QAA/30DAA to the 90DAA. Does it matter how long the money has been in the QAA/30DAA? Or is it just a simple calculation? Does it work the other way? Do you move PF cash from the 90DAA to the 30DAA and QAA?
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jlend
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Post by jlend on Dec 9, 2019 14:31:45 GMT
Hi stuartassetzcapital Interesting to see the new net PF figures after ring fencing in the access accounts. QAA PF Last update before ring fence at 30 Sept 1.78m After ring fencing at 30 Nov 1.16m 30DAA PF Last update before ring fence at 30 Sept 2.2m After ring fencing at 30 Nov 1.3m 90DAA PF Last update before ring fence at 30 Sept .346m After ring fencing at 30 Nov 0.49m The 30 Sept 30DAA and QAA figures are after some excess was removed I believe. The 30DAA PF was as high as 2.5m in the past but it looks like some money was removed. Am struggling to understand how the 90DAA figure is so high after ring fencing when the Sept figure is lower? PF balances may well have accrued to people's portfolios in say the QAA and if they moved their investment to 90DAA this may have created growth in that account. In the end the £ figures are correct post ringfencing and there are clearly also large ringfenced cash balances on top of those - both protect the loan portfolio in those accounts but only the non-ringfenced balances can be quoted as PF cash under the regulations. Thanks stuartassetzcapitalAre you not able to display the expected losses and coverage ratio stats any more due to the regulations?
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jlend
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Post by jlend on Dec 9, 2019 15:57:30 GMT
stuartassetzcapital thanks On the page you display both the total PF cash balance and the non ring fenced PF cash balance Can we deduce the ring fenced amount from the difference? Will you be updating the total PF cash balance? Hi jlend , can I ask exactly what you’re trying to ascertain with all these detailed questions please? In terms that might make sense to a non-statistician/mathematician.  Fair question so for background. I can see the 90DAA is much higher risk than the QAA and 30DAA. AC make it clear the 90DAA PF accrues at a slower rate and it currently has a lot less spare cash in it. I can also see that between 30th September and 30th November the 90DAA PF based on AC's supplied numbers has grown considerably. I was trying to find out where the money had come from and how much had been added. I now know it came from the QAA and 30DAA PF. I would like to know what exactly has been transferred and when and how it was calculated. I would also like to know if there will be further PF transfers in the future if people move money between the PF accounts or if this was a one off. It will help understand how AC are moving money around going forward and if the 90DAA is more or less risky. I was also trying to find out if there is any reason we can't see the expected losses and coverage ratio any more due to the FCA as I was curious as we can see them on other platforms I believe. The questions were so I made sure I understood as I felt I had been misleld in the past, e.g. with the GBBA when this was said that as far as I can see was never implemented. " if interest is due to be paid on a certain date and is missed then the Provision Fund (PF) is there to help pay that to help monthly interest on the account remain at 7%. If capital repayment is due and is late/ a default happens then interest continues to accrue on an interest-accrued loan and would continue to accrue (and would not be paid by the PF) until recovery had been completed and then the total accrued interest would be paid out including the default period. If the loan had monthly interest then this would be eligible for payment by the PF at that time of missed payment on a discretionary basis until full recovery had been completed. Due to interest accruing (or being paid in the case of monthly payment loans) and prior to any capital loss having been crystalised, no payout of any capital would occur from the PF until the recovery and any possible loss was crystalised, at which point if all capital and also accrued interest had been paid then no PF payment would be required. If there was a shortfall then the PF would be asked to pay. Given the Great British Business Account (GBBA) account is designed for income investment then this approach is fair as an extended period of default interest accruing for the investor is aligned with the core objective of the account, income. "
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sl75
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Post by sl75 on Dec 9, 2019 16:37:19 GMT
I was trying to find out where the money had come from and how much had been added. I now know it came from the QAA and 30DAA PF. I would like to know what exactly has been transferred and when and how it was calculated. I would also like to know if there will be further PF transfers in the future if people move money between the PF accounts or if this was a one off. It will help understand how AC are moving money around going forward and if the 90DAA is more or less risky. In terms of what AC actually do, I'm at least a little confused.
In terms of what I would expect it SHOULD do:
- PF monies can be associated with an ACCOUNT or with a LOAN.
- when monies are "ringfenced" to cover an expected loss, they'd be deducted from the PF balance associated with each account in proportion to how much of the loan each holds, and credited to the PF balance associated with the loan. - as the loan continues to trade the proportion of that loan associated with each account would change. - if recoveries are made, and the ringfenced funds are returned, they'd be returned to the PF associated with each account based on the holding of the loan at that time.
That would mean that transferring large quantities of suspended loans from the QAA/30DAA to the 90DAA and then subsequently making a full recovery of the loan without calling upon the ringfenced funds would have the net effect of transferring money from the QAA and 30DAA PF to the 90DAA PF, but doing so indirectly, and even so this would only have a net benefit to the 90DAA if recoveries are being made faster than other loans are needing to have fresh monies ringfenced.
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