blender
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Post by blender on Aug 7, 2020 12:49:21 GMT
Just so I know where I'm going, can somebody cofirm that I have this right:
- Money from repayment of loans (like the several million that has been repaid this week, but not credited to lenders accounts) will still be distributed pro rata as at present, regardless of what is happening on the SMS.
- Discounts on the SM are only relevant when it comes to deciding who gets any new money invested onto the platform
I believe that is the case. The interesting point concerns cash which has not been repaid. If it has still not been distributed when you sell at a discount, then if for example you sell everything at a discount then you will lose your part of the per distribution. I guess, or hope, that they will make one large pro-rata distribution just before the new system goes live and before trading is restored on the Access Accounts. It all has to be reconciled and rollbackable.
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blender
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Post by blender on Aug 7, 2020 12:54:25 GMT
Just so I know where I'm going, can somebody cofirm that I have this right:
- Money from repayment of loans (like the several million that has been repaid this week, but not credited to lenders accounts) will still be distributed pro rata as at present, regardless of what is happening on the SMS.
- Discounts on the SM are only relevant when it comes to deciding who gets any new money invested onto the platform
Agree with first point, but not with the second. On the secondary market there is no net new money into the AA, just an exchange from one investor to another. I think point two is OK in that it is 'new money invested' . The buying money comes from a cash account and the cash is not already invested, it's resting in the cash account and you cannot say where it came from.
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Post by bradley02 on Aug 7, 2020 15:20:57 GMT
Apologies for my confusion on this but..
On this forum 2nd May from Stuart Law regarding proposed Secondary Market
We will be posting details of how the secondary market works once details are finalised and a little closer to launch. As requested though, we can now answer some questions.
It is presently intended that the existing withdrawals in the original withdrawal queue shall remain in place and at their present date and time stamp as per that withdrawal queue. They shall therefore now be called 'Sell' orders at par (full) value and with no discount in the new marketplace. IT IS PRESENTLY INTENDED THAT THOSE GO BACK TO FIFO PRIORITY AND THAT ALL TRADES AT PAR EXECUTE IN THE DATE ORDER THEY WERE ORIGINALLY POSTED. The old withdrawal system is therefore planned to be absorbed into the marketplace and returns to FIFO, although of course offers to sell at a discount will be served to new investors first of all so that new investment automatically takes advantage of the oldest and highest discounts first of all.
Any loan redemption capital that is repaid to investors is intended to be paid pro rata to the size of each Sell order instruction in the marketplace, hence reducing your sell order if it is still waiting to execute against a new willing buyer.
Interest will operate as normal we expect.
Further details will be issued in due course and this explanation enhanced. Please post questions away from this information thread thank you.
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ian
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Post by ian on Aug 7, 2020 15:24:31 GMT
When we will access to the £6m of Capital redeemed this week?
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blender
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Post by blender on Aug 7, 2020 15:27:49 GMT
Apologies for my confusion on this but.. On this forum 2nd May from Stuart Law regarding proposed Secondary Market We will be posting details of how the secondary market works once details are finalised and a little closer to launch. As requested though, we can now answer some questions. It is presently intended that the existing withdrawals in the original withdrawal queue shall remain in place and at their present date and time stamp as per that withdrawal queue. They shall therefore now be called 'Sell' orders at par (full) value and with no discount in the new marketplace. It is presently intended that those go back to a FIFO priority and that all trades at par value will execute in the date order they were originally posted. The old withdrawal system is therefore planned to be absorbed into the marketplace and returns to FIFO, although of course offers to sell at a discount will be served to new investors first of all so that new investment automatically takes advantage of the oldest and highest discounts first of all. Any loan redemption capital that is repaid to investors is intended to be paid pro rata to the size of each Sell order instruction in the marketplace, hence reducing your sell order if it is still waiting to execute against a new willing buyer. Interest will operate as normal we expect. Further details will be issued in due course and this explanation enhanced. Please post questions away from this information thread thank you. What was 'presently intended' in May must be superseded by today's formal notice by email: 'If you’ve already made a withdrawal request and it’s awaiting withdrawal, you don’t need to take any further action. Your request has automatically been converted to a ‘par value’ (0% discount) marketplace Withdrawal Instruction and will retain its position in the queue. This Withdrawal Instruction will continue to be fulfilled over time on a pro-rata basis (as is currently the case).' FIFO is not coming back yet - but it probably will.
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Post by bradley02 on Aug 7, 2020 15:41:49 GMT
Apologies for my confusion on this but.. On this forum 2nd May from Stuart Law regarding proposed Secondary Market We will be posting details of how the secondary market works once details are finalised and a little closer to launch. As requested though, we can now answer some questions. It is presently intended that the existing withdrawals in the original withdrawal queue shall remain in place and at their present date and time stamp as per that withdrawal queue. They shall therefore now be called 'Sell' orders at par (full) value and with no discount in the new marketplace. It is presently intended that those go back to a FIFO priority and that all trades at par value will execute in the date order they were originally posted. The old withdrawal system is therefore planned to be absorbed into the marketplace and returns to FIFO, although of course offers to sell at a discount will be served to new investors first of all so that new investment automatically takes advantage of the oldest and highest discounts first of all. Any loan redemption capital that is repaid to investors is intended to be paid pro rata to the size of each Sell order instruction in the marketplace, hence reducing your sell order if it is still waiting to execute against a new willing buyer. Interest will operate as normal we expect. Further details will be issued in due course and this explanation enhanced. Please post questions away from this information thread thank you. What was 'presently intended' in May must be superseded by today's formal notice by email: 'If you’ve already made a withdrawal request and it’s awaiting withdrawal, you don’t need to take any further action. Your request has automatically been converted to a ‘par value’ (0% discount) marketplace Withdrawal Instruction and will retain its position in the queue. This Withdrawal Instruction will continue to be fulfilled over time on a pro-rata basis (as is currently the case).' FIFO is not coming back yet - but it probably will. Thank you Blender. The five month wait for improvement to liquidity in that case will be minimal at best if no return of FIFO for withdrawals. If discounted AA parts are re-listed for sale or withdrawal at discount or par and if flipping the discounted parts is the new market normal, liquidity for anyone not wanting to discount will remain the same I guess.
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Mark64
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Post by Mark64 on Aug 7, 2020 15:45:42 GMT
Chris,
Existing mature withdrawals will transfer to QAA at lowest interest rate and sit behind all discounted withdrawals-unlikely to ever sell? Or is it different to this bad position?
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r00lish67
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Post by r00lish67 on Aug 7, 2020 15:52:20 GMT
What was 'presently intended' in May must be superseded by today's formal notice by email: 'If you’ve already made a withdrawal request and it’s awaiting withdrawal, you don’t need to take any further action. Your request has automatically been converted to a ‘par value’ (0% discount) marketplace Withdrawal Instruction and will retain its position in the queue. This Withdrawal Instruction will continue to be fulfilled over time on a pro-rata basis (as is currently the case).' FIFO is not coming back yet - but it probably will. Thank you Blender. The five month wait for improvement to liquidity in that case will be minimal at best if no return of FIFO for withdrawals. If discounted AA parts are re-listed for sale or withdrawal at discount or par and if flipping the discounted parts is the new market normal, liquidity for anyone not wanting to discount will remain the same I guess. Well, yes but..... this is an investment that has been partially damaged (to a debatable extent) by COVID-19 implications. Why wouldn't liquidity be impacted at par? It's fundamentally worth (probably) a bit less. All the SM will do is allow market participation at the market-assessed value whatever that may be. As it is, we (mostly) all want to sell, which is a bit useless. In short, liquidity should be greatly enhanced, it's just not a reasonable expectation for liquidity to be available at par (in the short term at least) edit: and flippers will only help liquidity - by buying from those who want to sell at a price they have after all chosen themselves. If they subsequently sell for more, well, good for them.
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theta
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Post by theta on Aug 9, 2020 15:02:01 GMT
this is an investment that has been partially damaged (to a debatable extent) by COVID-19 implications. Why wouldn't liquidity be impacted at par? It's fundamentally worth (probably) a bit less. All the SM will do is allow market participation at the market-assessed value whatever that may be. Indeed. Moreover, while it's hard to imagine right now, it is conceivable that the market clearing level will at some point be above par, (just like bonds trading above par). Consider a situation where virus concern is gone and the economy fully recovers, and demand for new loans can't keep up with lender inflows, so AA is rationed at the entrance rather at the exit. New investors may decide to pay say 1% premium, which means they break even after 2-3 months, which they may decide is worth it if the alternative is to have the cash earn zero.
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r00lish67
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Post by r00lish67 on Aug 9, 2020 15:20:00 GMT
this is an investment that has been partially damaged (to a debatable extent) by COVID-19 implications. Why wouldn't liquidity be impacted at par? It's fundamentally worth (probably) a bit less. All the SM will do is allow market participation at the market-assessed value whatever that may be. Indeed. Moreover, while it's hard to imagine right now, it is conceivable that the market clearing level will at some point be above par, (just like bonds trading above par). Consider a situation where virus concern is gone and the economy fully recovers, and demand for new loans can't keep up with lender inflows, so AA is rationed at the entrance rather at the exit. New investors may decide to pay say 1% premium, which means they break even after 2-3 months, which they may decide is worth it if the alternative is to have the cash earn zero. Would be nice. In practice though, does the new SM support premiums? If not we'd just end up with whoever has the fastest bot/fingers grabbing pieces when they pop up.
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Post by Ace on Aug 9, 2020 15:41:09 GMT
Indeed. Moreover, while it's hard to imagine right now, it is conceivable that the market clearing level will at some point be above par, (just like bonds trading above par). Consider a situation where virus concern is gone and the economy fully recovers, and demand for new loans can't keep up with lender inflows, so AA is rationed at the entrance rather at the exit. New investors may decide to pay say 1% premium, which means they break even after 2-3 months, which they may decide is worth it if the alternative is to have the cash earn zero. Would be nice. In practice though, does the new SM support premiums? If not we'd just end up with whoever has the fastest bot/fingers grabbing pieces when they pop up.Wouldn't there just be an orderly queue based on bid time for bids at par?
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Aug 9, 2020 16:02:53 GMT
Indeed. Moreover, while it's hard to imagine right now, it is conceivable that the market clearing level will at some point be above par, (just like bonds trading above par). Consider a situation where virus concern is gone and the economy fully recovers, and demand for new loans can't keep up with lender inflows, so AA is rationed at the entrance rather at the exit. New investors may decide to pay say 1% premium, which means they break even after 2-3 months, which they may decide is worth it if the alternative is to have the cash earn zero. Would be nice. In practice though, does the new SM support premiums? If not we'd just end up with whoever has the fastest bot/fingers grabbing pieces when they pop up. AC are ideologically opposed to premiums. I dont see a scenario where normal conditions are in operation and the AA isnt accepting investments as AC will presumably be lending as normal and creating requirements for cash. ISTM FFF will only exist if noone has set a buy order at a comparable discount. If you are a buyer at a set discount why would you not just place the order on the market and wait. There is no difference on cash drag having funds queued to buy as opposed to just sat in the cash account. It will be no different to the MLA. If I want a certain loan at discount, I place a buy order and wait. The only difference is that rather than everyone with a match buy order getting a piece, it will be FIFO and even more pertinent to have orders sat waiting.
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Post by davee39 on Aug 9, 2020 16:23:43 GMT
There seems to be some confusion regarding the par Queue.
The following is my understanding of how things will work.
As I see it, under normal operation there is no queue. Liquidity in the market allows the AA accounts to act as market makers so buying in and selling out is seamless.
The new arrangement allows the AA to trade at discounts of zero or greater.
Where Loans are listed at a discount they will be matched with buyers based on when they entered the discounted sale queue for that discount level.
If no discounted loans were available and new money was to be available to purchase par loans, then the FIFO par queue would satisfy the new money requests. The alternative
would be for a re-adjustment to holdings where everyone got a 'new money' pro rata share which goes against the creation of an 'at par' queue.
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star dust
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Post by star dust on Aug 9, 2020 17:15:45 GMT
Would be nice. In practice though, does the new SM support premiums? If not we'd just end up with whoever has the fastest bot/fingers grabbing pieces when they pop up. AC are ideologically opposed to premiums. I dont see a scenario where normal conditions are in operation and the AA isnt accepting investments as AC will presumably be lending as normal and creating requirements for cash. ISTM FFF will only exist if noone has set a buy order at a comparable discount. If you are a buyer at a set discount why would you not just place the order on the market and wait. There is no difference on cash drag having funds queued to buy as opposed to just sat in the cash account. It will be no different to the MLA. If I want a certain loan at discount, I place a buy order and wait. The only difference is that rather than everyone with a match buy order getting a piece, it will be FIFO and even more pertinent to have orders sat waiting. Well it's FFF for discount Q position surely? Seems like it's been designed for those with bots. What a pity, it was one of the things I did like about MLIA, you set your buy or sell order and received your pro-rata portion, given it wasn't instant matching people with bots didn't really have too much of an advantage. Obviously most of us are yet to see it, but does anyone know if you will be able to see your position in the discount Q? I guess those who beta tested will also have an advantage in knowing exactly what to do the instant it goes live.
I'm all but out of AC (bar the indisposable dross) and still haven't made up my mind whether it's worth going back in to purchase any discounted QAA, bots will be another thing that puts me off.
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Post by Deleted on Aug 9, 2020 17:52:17 GMT
I'm all but out of AC (bar the indisposable dross) and still haven't made up my mind whether it's worth going back in to purchase any discounted QAA, bots will be another thing that puts me off. I used to get annoyed about the bots on platforms like MT and LY. These days, I think happily about the toxic loans I missed out on because bots got there first... and all the bot owners who are no doubt stuck with them now instead of me...
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