Post by cwah on Dec 21, 2020 19:54:33 GMT
Hello,
I keep having thought about all these re-insurance and faqs about how our loans were safe in the event of insolvency.
And FCA's approval should show the protection is enough... see here from the FCA itself:
"Arrangements that are required to be put in place under SYSC 4.1.8AR may include any one or more of the following:
(1) entering into an arrangement with another firm that has the appropriate permissions to take over the management and administration of P2P agreements if the operator ceases to operate the electronic system in relation to lending and, where appropriate:
(a) obtaining prior and informed consent from lender clients to fund the continued cost of management and administration of their respective loans, for example through increased commissions; and/or
(b) obtaining prior and informed consent from lender clients and borrower clients for the transfer of the service of managing and administration of P2P agreements from the firm to that other firm; or
(2) holding sufficient collateral to cover the cost of management and administration while the loan book is wound down, ensuring that the collateral is held through a structure that is ring-fenced in the event of the firm’s insolvency; or
(4) managing the loan book in a way that ensures that income from P2P agreements facilitated by the firm is sufficient to cover the costs of managing and administering those agreements during the winding down process, taking into account the reduction of the loan pool and fee income from it."
www.handbook.fca.org.uk/handbook/SYSC/4/1.html
So the FCA should make sure one of these 3 requirements are achieved... but so far I can't see in any of the insolvency recovery anything in that line (hello Lendy and FS).
The administration cost and platform fee were never obtened prior or consented, there are no ring fencing and their are insufficient fund to cover the cost.
Worse even, as investors we are ranked below creditor and a feeding every crook.
And when you think it can't be worse, the hidden terms makes it even worse as their fee are not based on the recovery but rather on initial loan provided. Who in hell would accept such term?
So even in the event of a good recovery, the fees are so massive that it's not uncommon to see 30-70% of the money going to finance these.
It just look like day light robbery, and no informed investor would ever invest with such term.
Have a missed something or what? How is it not screwed up?
I keep having thought about all these re-insurance and faqs about how our loans were safe in the event of insolvency.
And FCA's approval should show the protection is enough... see here from the FCA itself:
"Arrangements that are required to be put in place under SYSC 4.1.8AR may include any one or more of the following:
(1) entering into an arrangement with another firm that has the appropriate permissions to take over the management and administration of P2P agreements if the operator ceases to operate the electronic system in relation to lending and, where appropriate:
(a) obtaining prior and informed consent from lender clients to fund the continued cost of management and administration of their respective loans, for example through increased commissions; and/or
(b) obtaining prior and informed consent from lender clients and borrower clients for the transfer of the service of managing and administration of P2P agreements from the firm to that other firm; or
(2) holding sufficient collateral to cover the cost of management and administration while the loan book is wound down, ensuring that the collateral is held through a structure that is ring-fenced in the event of the firm’s insolvency; or
(4) managing the loan book in a way that ensures that income from P2P agreements facilitated by the firm is sufficient to cover the costs of managing and administering those agreements during the winding down process, taking into account the reduction of the loan pool and fee income from it."
www.handbook.fca.org.uk/handbook/SYSC/4/1.html
So the FCA should make sure one of these 3 requirements are achieved... but so far I can't see in any of the insolvency recovery anything in that line (hello Lendy and FS).
The administration cost and platform fee were never obtened prior or consented, there are no ring fencing and their are insufficient fund to cover the cost.
Worse even, as investors we are ranked below creditor and a feeding every crook.
And when you think it can't be worse, the hidden terms makes it even worse as their fee are not based on the recovery but rather on initial loan provided. Who in hell would accept such term?
So even in the event of a good recovery, the fees are so massive that it's not uncommon to see 30-70% of the money going to finance these.
It just look like day light robbery, and no informed investor would ever invest with such term.
Have a missed something or what? How is it not screwed up?
