chris1200
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Post by chris1200 on Apr 17, 2020 13:41:04 GMT
Also they skimmed over quite quickly the fact that they have reduced the loan provision considerably: By my calculations that's roughly a 50% reduction in the provision fund. That's pretty significant, they don't seem to provide any explanation for that. We should keep in mind, though, that (hopefully) most defaults will have at least some recovery so, over time, it wouldn't be a complete £595k dent to the provision fund. But obviously we don't know the details of this default yet. On the withdrawals point, my assumption is that they don't think they can alter the T&C to do this based on the current T&C (but this is just a guess). If that's the case, then that's a real error of foresight in the drafting of those T&C, especially given other platforms appear to have been able to make this change.
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Post by garreh on Apr 17, 2020 13:49:55 GMT
On the withdrawals point, my assumption is that they don't think they can alter the T&C to do this based on the current T&C (but this is just a guess). If that's the case, then that's a real error of foresight in the drafting of those T&C, especially given other platforms appear to have been able to make this change. When I contacted them they too reiterated that they cannot change the terms and conditions e.g extend the Liquidity Event or allow withdrawals until it is resolved. They said the 3 month timeframe sounded reasonable and sensible at the time when they were drafting the terms and conditions. It's not clear from the terms and conditions what criteria needs to be satisfied for them to call off the Liquidity Event. That's the real elephant in the room. This is why I am concerned that their default position is just to allow it to go onto a Resolution Event, even though they have stated this is not the case - their terms seem to maneuver them into that position.
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chris1200
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Post by chris1200 on Apr 17, 2020 13:52:25 GMT
On the withdrawals point, my assumption is that they don't think they can alter the T&C to do this based on the current T&C (but this is just a guess). If that's the case, then that's a real error of foresight in the drafting of those T&C, especially given other platforms appear to have been able to make this change. When I contacted them they too reiterated that they cannot change the terms and conditions e.g extend the Liquidity Event or allow withdrawals until it is resolved. They said the 3 month timeframe sounded reasonable and sensible at the time when they were drafting the terms and conditions. It's not clear from the terms and conditions what criteria needs to be satisfied for them to call off the Liquidity Event. That's the real elephant in the room. This is why I am concerned that their default position is just to allow it to go onto a Resolution Event, even though they have stated this is not the case - their terms seem to maneuver them into that position. Hmmm my point is more about altering the T&C to change the withdrawal process after the Liquidity Event, rather than extending the Liquidity Event period or allowing withdrawals during it. Perhaps I've misunderstood their email and they only mean they can't make changes before lifting the Liquidity Event. I might email them about this...
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Post by garreh on Apr 17, 2020 13:57:57 GMT
When I contacted them they too reiterated that they cannot change the terms and conditions e.g extend the Liquidity Event or allow withdrawals until it is resolved. They said the 3 month timeframe sounded reasonable and sensible at the time when they were drafting the terms and conditions. It's not clear from the terms and conditions what criteria needs to be satisfied for them to call off the Liquidity Event. That's the real elephant in the room. This is why I am concerned that their default position is just to allow it to go onto a Resolution Event, even though they have stated this is not the case - their terms seem to maneuver them into that position. Hmmm my point is more about altering the T&C to change the withdrawal process after the Liquidity Event, rather than extending the Liquidity Event period or allowing withdrawals during it. Perhaps I've misunderstood their email and they only mean they can't make changes before lifting the Liquidity Event. I might email them about this... I think your right, they can't make any changes to the T&C during the liquidity event, but I think what they are suggesting is even after the event is lifted they can't change their T&Cs for withdrawals. That's why I believe they made that comment about how they want investors to not withdraw when the event is lifted. I'm obviously reading between the lines, we don't actually know if that's the case and I am not qualified to know if the T&Cs can be adjusted - I would imagine they can be because most companies have a statement "T&Cs subject to change..." blah blah, and as you say other P2P companies have been adapting their terms to protect investors and the platform.
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chris1200
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Post by chris1200 on Apr 17, 2020 14:02:56 GMT
Hmmm my point is more about altering the T&C to change the withdrawal process after the Liquidity Event, rather than extending the Liquidity Event period or allowing withdrawals during it. Perhaps I've misunderstood their email and they only mean they can't make changes before lifting the Liquidity Event. I might email them about this... Your right they can't make any changes to the T&C during the liquidity event, but I believe they are suggesting even after the event is lifted they can't change their T&Cs for withdrawals. That's why I believe they made that comment about how they want investors to not withdraw when the event is lifted. I've emailed them to check this point. Edit: I originally wrote some analysis of the GS T&C here (compared to RateSetter and others); but it's been a few years since I last practiced law, and I don't want to write anything that's not definitely correct here, so have deleted.
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Post by drphil on Apr 17, 2020 14:19:33 GMT
For comparison, this is what the Assetz Capital terms say:
20. Altered Circumstances and Changes to The Terms
If there is a change in circumstances or a change in the law, HM Revenue & Customs practice or regulations or the interpretation of them, or if any Assetz Capital Company wishes to make changes to the services which it provides on the Network or Website, the Assetz Capital Companies may amend these Terms from time to time as they think fit.
Where a change to these Terms does not affect existing Micro Loans and does not disadvantage existing Lending Members or where the changes are reasonably believed by the Assetz Capital Companies to be in the interests of the Lending Members, the Assetz Capital Companies may make any amendments to these Terms at any time with immediate effect. Where it is necessary or desirable to make changes to these Terms which affect existing Micro Loans or may disadvantage existing Lending Members, the Assetz Capital Companies will endeavour to provide 30 days notice before any changes take effect. Any such notice shall be posted on the Website.
Any amendments will be posted on the Website as soon as reasonably practicable. By continuing to use the Website, by either logging in or leaving investments within Investment Accounts or Access Accounts on a daily basis, each Lending Member agrees to be bound by the amended Terms.
though I have to say that I do not have 100% confidence in AC's attention to detail generally.
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chris1200
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Post by chris1200 on Apr 17, 2020 14:28:23 GMT
For comparison, this is what the Assetz Capital terms say:
20. Altered Circumstances and Changes to The Terms
If there is a change in circumstances or a change in the law, HM Revenue & Customs practice or regulations or the interpretation of them, or if any Assetz Capital Company wishes to make changes to the services which it provides on the Network or Website, the Assetz Capital Companies may amend these Terms from time to time as they think fit.
Where a change to these Terms does not affect existing Micro Loans and does not disadvantage existing Lending Members or where the changes are reasonably believed by the Assetz Capital Companies to be in the interests of the Lending Members, the Assetz Capital Companies may make any amendments to these Terms at any time with immediate effect. Where it is necessary or desirable to make changes to these Terms which affect existing Micro Loans or may disadvantage existing Lending Members, the Assetz Capital Companies will endeavour to provide 30 days notice before any changes take effect. Any such notice shall be posted on the Website.
Any amendments will be posted on the Website as soon as reasonably practicable. By continuing to use the Website, by either logging in or leaving investments within Investment Accounts or Access Accounts on a daily basis, each Lending Member agrees to be bound by the amended Terms.
though I have to say that I do not have 100% confidence in AC's attention to detail generally.
It's at least rather more specific than Clause 9.5 of GS's T&C! With regard to withdrawals, GS's Clause 7 seems woefully imprecise about the repayment/access to funds mechanism (e.g. Clause 7.2 "This allows investors to get repaid as expected after 30 days" makes me shudder) and I can't see anything about actually withdrawing money - but, as I've said above, I'll refrain from full legal analysis!
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Post by garreh on Apr 17, 2020 14:31:17 GMT
For comparison, this is what the Assetz Capital terms say:
20. Altered Circumstances and Changes to The Terms
If there is a change in circumstances or a change in the law, HM Revenue & Customs practice or regulations or the interpretation of them, or if any Assetz Capital Company wishes to make changes to the services which it provides on the Network or Website, the Assetz Capital Companies may amend these Terms from time to time as they think fit.
Where a change to these Terms does not affect existing Micro Loans and does not disadvantage existing Lending Members or where the changes are reasonably believed by the Assetz Capital Companies to be in the interests of the Lending Members, the Assetz Capital Companies may make any amendments to these Terms at any time with immediate effect. Where it is necessary or desirable to make changes to these Terms which affect existing Micro Loans or may disadvantage existing Lending Members, the Assetz Capital Companies will endeavour to provide 30 days notice before any changes take effect. Any such notice shall be posted on the Website.
Any amendments will be posted on the Website as soon as reasonably practicable. By continuing to use the Website, by either logging in or leaving investments within Investment Accounts or Access Accounts on a daily basis, each Lending Member agrees to be bound by the amended Terms.
though I have to say that I do not have 100% confidence in AC's attention to detail generally.
Thanks for sharing that. I do hope Growth Street have something similar. Having the ability to adapt your T&Cs to evolving market conditions that is in the interest of the platform is definitely more preferable in my view than a fixed rulebook.
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alender
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Post by alender on Apr 17, 2020 14:33:10 GMT
Also they skimmed over quite quickly the fact that they have reduced the provision fund considerably: By my calculations that's roughly a 50% reduction in the provision fund. That's pretty significant, they don't seem to provide any explanation for that. What is meant by a facility, is this some sort of term for a bad or bad loans now moved to the PF?
A facility implies to me a commitment which can be taken up when required up to a set value (or at least it did on the systems I worked on), does that imply that the £595,000 is part of a larger sum that a borrower can drawdown or is this the full amount i.e. facility now closed or can more money be assigned to the PF as part of the facility?
If this simply means one or more loans have defaulted would be good to know more detail and if any action can be taken to recover at least some of the money.
More information please GS
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chris1200
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Post by chris1200 on Apr 17, 2020 14:35:14 GMT
Also they skimmed over quite quickly the fact that they have reduced the provision fund considerably: By my calculations that's roughly a 50% reduction in the provision fund. That's pretty significant, they don't seem to provide any explanation for that. What is meant by a facility, is this some sort of term for a bad or bad loans now moved to the PF?
A facility implies to me a commitment which can be taken up when required up to a set value (or at least it did on the systems I worked on), does that imply that the £595,000 is part of a larger sum that a borrower can drawdown or is this the full amount i.e. facility now closed or can more money be assigned to the PF as part of the facility?
If this simply means one or more loans have defaulted would be good to know more detail and if any action can be taken to recover at least some of the money.
More information please GS
Facility just means loan agreement in this context. It could be a flexible facility, but in this case the default amount is clearly £595k because they say this is the 'principal outstanding'. It's fairly irrelevant to us what the maximum available amount under the facility was at this stage. As I've already said above, I'm sure they will be attempting partial recoveries.
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chris1200
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Post by chris1200 on Apr 17, 2020 14:39:01 GMT
For comparison, this is what the Assetz Capital terms say:
20. Altered Circumstances and Changes to The Terms
If there is a change in circumstances or a change in the law, HM Revenue & Customs practice or regulations or the interpretation of them, or if any Assetz Capital Company wishes to make changes to the services which it provides on the Network or Website, the Assetz Capital Companies may amend these Terms from time to time as they think fit.
Where a change to these Terms does not affect existing Micro Loans and does not disadvantage existing Lending Members or where the changes are reasonably believed by the Assetz Capital Companies to be in the interests of the Lending Members, the Assetz Capital Companies may make any amendments to these Terms at any time with immediate effect. Where it is necessary or desirable to make changes to these Terms which affect existing Micro Loans or may disadvantage existing Lending Members, the Assetz Capital Companies will endeavour to provide 30 days notice before any changes take effect. Any such notice shall be posted on the Website.
Any amendments will be posted on the Website as soon as reasonably practicable. By continuing to use the Website, by either logging in or leaving investments within Investment Accounts or Access Accounts on a daily basis, each Lending Member agrees to be bound by the amended Terms.
though I have to say that I do not have 100% confidence in AC's attention to detail generally.
Thanks for sharing that. I do hope Growth Street have something similar. Having the ability to adapt your T&Cs to evolving market conditions that is in the interest of the platform is definitely more preferable in my view than a fixed rulebook. Once again, I'll hold off on legal commentary, but I'd be intrigued to know what AC would say if any lenders refused to be bound by the new terms (re withdrawals) as per this Clause 20!
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alender
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Post by alender on Apr 17, 2020 14:43:31 GMT
For comparison, this is what the Assetz Capital terms say:
20. Altered Circumstances and Changes to The Terms
If there is a change in circumstances or a change in the law, HM Revenue & Customs practice or regulations or the interpretation of them, or if any Assetz Capital Company wishes to make changes to the services which it provides on the Network or Website, the Assetz Capital Companies may amend these Terms from time to time as they think fit.
Where a change to these Terms does not affect existing Micro Loans and does not disadvantage existing Lending Members or where the changes are reasonably believed by the Assetz Capital Companies to be in the interests of the Lending Members, the Assetz Capital Companies may make any amendments to these Terms at any time with immediate effect. Where it is necessary or desirable to make changes to these Terms which affect existing Micro Loans or may disadvantage existing Lending Members, the Assetz Capital Companies will endeavour to provide 30 days notice before any changes take effect. Any such notice shall be posted on the Website.
Any amendments will be posted on the Website as soon as reasonably practicable. By continuing to use the Website, by either logging in or leaving investments within Investment Accounts or Access Accounts on a daily basis, each Lending Member agrees to be bound by the amended Terms.
though I have to say that I do not have 100% confidence in AC's attention to detail generally.
Thanks for sharing that. I do hope Growth Street have something similar. Having the ability to adapt your T&Cs to evolving market conditions that is in the interest of the platform is definitely more preferable in my view than a fixed rulebook. Changing the T&Cs are an area of contention by AC lenders and I am sure this will eventuality be resolved by the FCA.
I believe T&Cs make up a contractual agreement between the lenders and the platform I am not sure of the legality that one party can have an enforceable clause that states they can change the T&Cs without the other party permission. When RS changed the T&Cs it gave its lenders the right to withdraw all of there funds from the platform and by not using this option the lenders accepted the new T&Cs.
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chris1200
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Post by chris1200 on Apr 17, 2020 14:46:01 GMT
Thanks for sharing that. I do hope Growth Street have something similar. Having the ability to adapt your T&Cs to evolving market conditions that is in the interest of the platform is definitely more preferable in my view than a fixed rulebook. Changing the T&Cs are an area of contention by AC lenders and I am sure this will eventuality be resolved by the FCA.
I believe T&Cs make up a contractual agreement between the lenders and the platform I am not sure of the legality that one party can have an enforceable clause that states they can change the T&Cs without the other party permission. When RS changed the T&Cs it gave its lenders the right to withdraw all of there funds from the platform and by not using this option the lenders accepted the new T&Cs.
Quite. This was partly what I wrote above and then deleted. A blanket clause to just change whatever you like whenever you like doesn't really work. It would make a mockery of the whole point of T&C. GS's own clause, as I say above, is... sketchy at best. The RS changes to which you refer, though, do not relate to queued withdrawals. RS has clear discussion in its T&C of liquidity being necessary for withdrawals to be allowed. That GS seems not to have any mention of this is... unfortunate.
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Post by drphil on Apr 17, 2020 14:50:39 GMT
For comparison, this is what the Assetz Capital terms say:
20. Altered Circumstances and Changes to The Terms
If there is a change in circumstances or a change in the law, HM Revenue & Customs practice or regulations or the interpretation of them, or if any Assetz Capital Company wishes to make changes to the services which it provides on the Network or Website, the Assetz Capital Companies may amend these Terms from time to time as they think fit.
Where a change to these Terms does not affect existing Micro Loans and does not disadvantage existing Lending Members or where the changes are reasonably believed by the Assetz Capital Companies to be in the interests of the Lending Members, the Assetz Capital Companies may make any amendments to these Terms at any time with immediate effect. Where it is necessary or desirable to make changes to these Terms which affect existing Micro Loans or may disadvantage existing Lending Members, the Assetz Capital Companies will endeavour to provide 30 days notice before any changes take effect. Any such notice shall be posted on the Website.
Any amendments will be posted on the Website as soon as reasonably practicable. By continuing to use the Website, by either logging in or leaving investments within Investment Accounts or Access Accounts on a daily basis, each Lending Member agrees to be bound by the amended Terms.
though I have to say that I do not have 100% confidence in AC's attention to detail generally.
Thanks for sharing that. I do hope Growth Street have something similar. Having the ability to adapt your T&Cs to evolving market conditions that is in the interest of the platform is definitely more preferable in my view than a fixed rulebook. To answer your question this is what GS say:
9.5. From time to time, we may make changes to these Terms. We will notify you of any material change to the Terms at least 14 days prior to the change coming into effect by sending an email to the address in your Growth Street Account. Revised terms will supersede and replace any prior versions of the Terms.
9.6. If any part of this Agreement is or becomes invalid, illegal or unenforceable, it will be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If modification is not possible, the relevant provision (or part of a provision) will be deemed deleted. Any modification or deletion under this clause will not affect the legality, validity and enforceability of the rest of the Agreement.
Not sure what "invaild" and "unenforceable" mean, other than by Law but isn't that covered by "illegal"?
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chris1200
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Post by chris1200 on Apr 17, 2020 14:54:02 GMT
Thanks for sharing that. I do hope Growth Street have something similar. Having the ability to adapt your T&Cs to evolving market conditions that is in the interest of the platform is definitely more preferable in my view than a fixed rulebook. To answer your question this is what GS say:
9.5. From time to time, we may make changes to these Terms. We will notify you of any material change to the Terms at least 14 days prior to the change coming into effect by sending an email to the address in your Growth Street Account. Revised terms will supersede and replace any prior versions of the Terms.
9.6. If any part of this Agreement is or becomes invalid, illegal or unenforceable, it will be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If modification is not possible, the relevant provision (or part of a provision) will be deemed deleted. Any modification or deletion under this clause will not affect the legality, validity and enforceability of the rest of the Agreement.
Not sure what "invaild" and "unenforceable" mean, other than by Law but isn't that covered by "illegal"?
As I say above, only 9.5 is really relevant here - but, also as per the above, it's so broad as to make it very difficult to use for existing investments I would imagine?? What we would need would be specific provision for changing withdrawal procedures in the event of certain things happening (for example as they do re Liquidity Events). Either that, or some language about withdrawals only being allowed when there is sufficient liquidity - which also seems to be lacking. Definitely a lot of overlap between the 9.6 terms - I guess they just wanted to try to tick all boxes!
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