cb25
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Post by cb25 on Jun 11, 2020 16:58:44 GMT
"Withdrawals from our Access Accounts are slower than usual as we are no longer operating in normal market conditions as a result of Coronavirus. There is currently a queuing [sic] system in place, click here to find out more."
Front page. That's the queue we wish to jump by selling our access holdings to other lenders. Presumably the capital sold will still be in the same place in the queue once it has been bought and sold - just the name of the owner changed. The MLA is entirely separate. I have sold my modest holdings in that at a small discount, and withdrawn the cash. When things went wrong I had already given notice on a part of the 90day account, which had expired. However I foolishly decided to leave that cash in the QAA, because it qualified for the promotion which was to pay on 6 April. I did not need the cash until June. We learn from our mistakes. That will clearly need clarification by AC. I would have assumed the purchased units will no longer be in the queue, putting the buyer in the same position (though with more units) as if they'd simply added the money to the access account.
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Post by davee39 on Jun 11, 2020 18:35:23 GMT
I do not see sold units staying in the queue.
My understanding is the queue will be sorted by both discount and date withdrawal requested, these will influence sales of portfolio holdings. In addition I expect cash reciepts from loan repayments and loan part sales (from the AA into the MLA) to be distributed pro rata as at present.
Discounted portfolio sales could then be returned to the queue at a lower discount, but will go to the back of that stream. Full visibility would lead to gaming and would be detrimental to the majority of lenders. I expect some rules will moderate this.
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dead-money
Rocket to the Moon
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Post by dead-money on Jun 11, 2020 19:44:52 GMT
Why's everyone concerned about queue position?
Currently all Access Account holdings awaiting withdrawal get a pro-rata distribution, being earlier in the 'queue' to withdrawal makes no difference to the amount of that pro-rata distribution. Your position in the queue would only be relevant if Assetz Capital changes the rules of the game again, which is not to say they wouldn't...
One would presume you could buy into the QAA by offering -20% to sellers on the secondary market. You then have a QAA holding which you can either request to withdrawal at par or put on the secondary market at a discount of your choosing or even leave invested...
Simple as that surely?
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rscal
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Post by rscal on Jun 11, 2020 20:37:25 GMT
Why's everyone concerned about queue position?
Currently all Access Account holdings awaiting withdrawal get a pro-rata distribution, being earlier in the 'queue' to withdrawal makes no difference to the amount of that pro-rata distribution. Your position in the queue would only be relevant if Assetz Capital changes the rules of the game again, which is not to say they wouldn't...
One would presume you could buy into the QAA by offering -20% to sellers on the secondary market. You then have a QAA holding which you can either request to withdrawal at par or put on the secondary market at a discount of your choosing or even leave invested...
Simple as that surely?
Sorry. I think I'm responsible for the confusion by mentioning a putative 'queue' that might apply in the discounting of AA holdings in circumstances where individual underlying loan holdings differ from person to person, But as cb25 pointed out there equal allocation by design so it's moot. There would be no need to queue (other than by rate offered) as there is no need to queue one's selling in the MLA at present. What happens is each separate seller at the lowest discount band is 'a unit' (say there are four ppl offering £10, £12, £30 and £48) and the buyer wants '£50'. That would be £12.50 each. But since one only has £10 to offer this would result in £40 being bought initially leaving three sellers offering £2, £20 and £38, £6 of the £10 remaining will be taken next to leave 2 sellers offering £18 and £36. and These then reduce to £16 and £34. Since that's how it works at present AC are likely to implement that scheme to the sale of AA holdings (at offered discount)
This might be perceived as unfair to larger sellers, in which case they can 'jump' the queue by offering larger discount.
But I could simply be wrong and AA sale may go pro-rata instead
[If you think about it, this is a 'singlar' sale compared to being able to sell loans separately in differing proportions in the MLA.]
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ilmoro
Member of DD Central
'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 Jun 11, 2020 21:17:23 GMT
dead-money rscal The probably functioning of the AA SM was posited here. p2pindependentforum.com/post/385085/threadIf that is what occurs then the queue will be a queue, FIFO. So sale priority will be determined by discount offered and time/date of offer as davee39 described. Currently, though it is not entirely clear, there would be three sources of funds being returned, funds investing into the AA via the market at discount or par releasing funds based on FIFO discounted queue, loan redemptions being distributed to all lenders exiting on prorata, and presumably surplus available cash will be released to fill withdrawal requests as before.
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Post by df on Jun 11, 2020 22:04:35 GMT
I do not see sold units staying in the queue. My understanding is the queue will be sorted by both discount and date withdrawal requested, these will influence sales of portfolio holdings. In addition I expect cash reciepts from loan repayments and loan part sales (from the AA into the MLA) to be distributed pro rata as at present. Discounted portfolio sales could then be returned to the queue at a lower discount, but will go to the back of that stream. Full visibility would lead to gaming and would be detrimental to the majority of lenders. I expect some rules will moderate this. I can see this happening, especially at the beginning when the most desperate will rush for the exit at any cost 
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blender
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Post by blender on Jun 11, 2020 22:18:29 GMT
Thanks for that link ilmoro. It probably helps to have a pig's brain in addition to the human one, rather than instead of as in my case.
The current FIFO queue of matured withdrawal requests becomes the queue for investment requests at par, but that queue is jumped by offers of discounts. Purchasers buy at best, first by discount and then by seniority. But also, some cash is still distributed as at present among those queued withdrawal requests, on the pro-rata basis. The purchased QAA is no longer in the withdrawal queue, and would have to go through the queue to be turned back into cash (at par). I think I understand it now.
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dead-money
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Post by dead-money on Jun 11, 2020 23:26:38 GMT
dead-money rscal The probably functioning of the AA SM was posited here. p2pindependentforum.com/post/385085/threadIf that is what occurs then the queue will be a queue, FIFO. So sale priority will be determined by discount offered and time/date of offer as davee39 described. Currently, though it is not entirely clear, there would be three sources of funds being returned, funds investing into the AA via the market at discount or par releasing funds based on FIFO discounted queue, loan redemptions being distributed to all lenders exiting on prorata, and presumably surplus available cash will be released to fill withdrawal requests as before. OK, so based on Stuart's statement of May 2nd; All new investment into AAs would take the highest discounts first, only taking oldest par in the queue if no discounted parts left.
There's no mechanism mentioned for buyer's to decide the discount at which they're willing to buy into the AAs at.
So it is seller's that set the discount they're willing to sell at and any discount below par will always precede par in the queue.
Whether this is what's delivered this month and how it works in practice remains to be seen.
For comparison, with MLA; Buyers can set the discount below which they'll buy Buyers can see how much is on offer at what discount. I would be expecting the same transparency with QAA secondary market.
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dead-money
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Post by dead-money on Jun 11, 2020 23:40:21 GMT
I do not see sold units staying in the queue. My understanding is the queue will be sorted by both discount and date withdrawal requested, these will influence sales of portfolio holdings. In addition I expect cash reciepts from loan repayments and loan part sales (from the AA into the MLA) to be distributed pro rata as at present. Discounted portfolio sales could then be returned to the queue at a lower discount, but will go to the back of that stream. Full visibility would lead to gaming and would be detrimental to the majority of lenders. I expect some rules will moderate this. I can see this happening, especially at the beginning when the most desperate will rush for the exit at any cost How would visibility of the discount market lead to gaming? The MLA shows units on offer and at what discount, so why should an AA discount market be different?
If sellers want to have a race to the bottom with deep discounts that's fine by me.
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blender
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Post by blender on Jun 12, 2020 7:44:42 GMT
I suppose that what is meant is that if you can see the queue of discounted offers, by order, size of discount and value of offer, then you could spot profit opportunities by knowing where the jumps in discounts are, then buying the heavily discounted offers up the point of transition of discount, then selling it at a slightly better discount. If the offers are manually created, you would get some time to sell - but could soon be out-discounted. However, you could presumably withdraw a offer and make a new one with a different discount. The problem would come if bots were used to exploit this opportunity, which would happen. The granularity of discount would be important, as well as the visibility of the offer queue. The MLA works on a loan by loan basis. Access is just large chunks of cash in a single queue with rapid changes of discount, and higher 'trading' volume.
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dead-money
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Post by dead-money on Jun 12, 2020 8:00:21 GMT
I suppose that what is meant is that if you can see the queue of discounted offers, by order, size of discount and value of offer, then you could spot profit opportunities by knowing where the jumps in discounts are, then buying the heavily discounted offers up the point of transition of discount, then selling it at a slightly better discount. If the offers are manually created, you would get some time to sell - but could soon be out-discounted. However, you could presumably withdraw a offer and make a new one with a different discount. The problem would come if bots were used to exploit this opportunity, which would happen. The granularity of discount would be important, as well as the visibility of the offer queue. The MLA works on a loan by loan basis. Access is just large chunks of cash in a single queue with rapid changes of discount, and higher 'trading' volume. Yep Arbitrage; so pretty much how my MLA account operates. Personally, this is how I'd expect AA market to work also.
If as a buyer you're supposed to go in blind and receive an unspecified, variable bonus amount of holdings for your money; I don't see the appeal of that.
PS, does AA have higher trading volume than MLA? I'm able to buy & sell 000's per day on MLA; currently I can't get tuppence out of AAs and won't be adding to AAs unless significant liquidity exists.
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blender
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Post by blender on Jun 12, 2020 8:43:23 GMT
Yes, In principle arbitrage is fine but the issue of fairness and the use of bots was a serious issue for FC before the black box. FC was infested with bots, and they allowed FC to present the black box as fairer and a response to complaints! As just a seller of part of my Access account it would not worry me - just as arbitrage has helped me to sell my small MLA. But those buying will wish to see fair access for manual purchasers, and Assetz would get some stick for allowing bots - they can't win. However, this is supposed to be a temporary SM, which could be shut down if no longer needed.
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Post by davee39 on Jun 12, 2020 8:50:11 GMT
Imagine Seller A has discounted at 10% and seller B has discounted at 5%.
Buyer X Buys all discounted parts at 10% and re-lists them at a discounted 7%.
Seller B stays stuck at the same position in the queue and has to compete.
I think 10% discounts are unlikely, but we will have to see what we end up with.
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Post by honda2ner on Jun 12, 2020 9:52:39 GMT
Personally I think too many people are over thinking the trading facility from a sellers point of view, yes it would be nice to have many of the things put forward but we need perspective. Let's not lose sight of the most important thing by far... The buyers. Without them being kept very very sweet this whole process is a complete waste of time.
The idea that buyers will have to buy in blind is ludicrous and it won't work (I wouldn't buy a penny). The only thing that attracted me to the AC MLA is the way investors are provided with lots of information, credit reports, surveyor reports etc. to make an informed choice and not just trust the damned black box AAs. To then offer a discount system where I have no idea what discount I'm buying in at is madness.
We all need to forget what we want and come up with something that is as attractive as possible to buyers, everything else is a sideshow. Let's hope AC is on the same page.
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andy5
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Post by andy5 on Jun 12, 2020 10:19:55 GMT
Let's hope AC is on the same page. Some parts of the firm itself are not fully on the same page as each other.
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