niceguy37
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Post by niceguy37 on Sept 16, 2015 9:28:22 GMT
Whereupon, you stick £25k into your MLIA, set your targets (huh, those were the days!) to authorise a Total Net Instruction of +£50, and let the system sweep your idle. I'd considered the above and the challenge. The only solution I could come up with for this was to limit the size of the sweep to match your total buy orders, ie what you have bid on. The problem with that is that it is simple to game... Pick a very popular loan with a long due date a bid on it, knowing you will get no units or almost no units. I really can't see a solution to prevent gaming the system. The only way I can see it to limit it to those people already invested. Allow an initial £1K or £2K to newcomers, to entice them into AC and get them lending, but then limit an individuals QAA holdings to the initial limit plus 50% of their loan portfolio.
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jonah
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Post by jonah on Sept 16, 2015 9:33:08 GMT
That's why I like multiple people thinking... An answer to a question I couldn't come up with in a matter of minutes.
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bigfoot12
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Post by bigfoot12 on Sept 16, 2015 10:08:37 GMT
I think an average figure of how long it takes to get into QAA would be of equal (or to me, more so) use. I agree that it would be very useful. How about how long the most recent £1,000 to enter the QAA waited to get in? Along with the size of the queue, and my (possibly multiple) position(s) in it. I think that just two numbers would be best (time to enter and time to leave), but clickable to give more detail. Edit: I don't think there is a need for a QAA2 as everyone knows we just need more loans. If the 3-4 loans per week promised (from March 2015) arrive the queue into the QAA will move quite quickly. (I had to add the 2015; I was worried that people might think I meant next year.)
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mikes1531
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Post by mikes1531 on Sept 16, 2015 10:45:50 GMT
Easy: limit the maximum idle cash sweep to 10% (or 15%, or 20%) of your total invested funds. How many real AC investors want or need to keep more than that idle awaiting new loan drawdowns and to pick up shrapnel. All those who are trying to increase their AC investment rapidly.
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mikes1531
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Post by mikes1531 on Sept 16, 2015 10:55:59 GMT
I think an average figure of how long it takes to get into QAA would be of equal (or to me, more so) use. I agree that it would be very useful. How about how long the most recent £1,000 to enter the QAA waited to get in? Along with the size of the queue, and my (possibly multiple) position(s) in it. I think that just two numbers would be best (time to enter and time to leave), but clickable to give more detail. I agree. I don't think there is a need for a QAA2 as everyone knows we just need more loans. If the 3-4 loans per week promised (from March 2015) arrive the queue into the QAA will move quite quickly. Only if people use the QAA as it was intended. Once £1M is 'parked' there by those SteveT referred to as DARTs, none of the idle funds from 'active' AC lenders would see any benefit from the QAA because that money always would be 'in the queue' rather than earning 3.75%.
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Post by chris on Sept 16, 2015 10:58:27 GMT
The other factor to remember is that more loan origination means more churn in the QAA. That's what we need to deliver now.
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bigfoot12
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Post by bigfoot12 on Sept 16, 2015 11:31:49 GMT
Once £1M is 'parked' there by those SteveT referred to as DARTs, none of the idle funds from 'active' AC lenders would see any benefit from the QAA because that money always would be 'in the queue' rather than earning 3.75%. If £1m was 'parked' it would be very easy for AC to increase the £1m cap. They could also increase the fraction investing in loans rather than cash. Whilst it might be annoying to us for a few months (whilst AC works out how static it is and lets the provision fund build up), long term I think it would be good for AC and for us.
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mikes1531
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Post by mikes1531 on Sept 16, 2015 11:55:03 GMT
The other factor to remember is that more loan origination means more churn in the QAA. : It should, but only if people use the QAA as it was intended. Once £1M is 'parked' there by those stevet referred to as DARTs, none of the idle funds from 'active' AC lenders would see any benefit from the QAA because that money always would be 'in the queue' rather than earning 3.75%. More deal flow would be most welcome, and when that happens we'll be able to see how the QAA works and whether it has become the victim of the DARTy parkers. Time will tell whether AC will be able to raise the QAA limit fast enough to stay ahead of them. Considering how much money is sitting in low-rate bank/BS accounts -- I was offered a 5-year fixed-rate bond paying 2% recently -- I expect the QAA to attract a lot of DART money. I can't help wondering, though... The QAA allows AC to take money in from investors and use some of it to fund loans while keeping some in cash to ensure liquidity so that their investors can earn interest while enjoying instant access. Whereas our heavily regulated banks do... what appears to me to be very nearly exactly the same thing. I'm sure that AC have had the QAA arrangements blessed by their compliance team, but I don't expect banks to be happy watching this happen. Whether the banks can do anything about this is another matter.
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Post by chris on Sept 16, 2015 12:00:40 GMT
The other factor to remember is that more loan origination means more churn in the QAA. : It should, but only if people use the QAA as it was intended. Once £1M is 'parked' there by those stevet referred to as DARTs, none of the idle funds from 'active' AC lenders would see any benefit from the QAA because that money always would be 'in the queue' rather than earning 3.75%. More deal flow would be most welcome, and when that happens we'll be able to see how the QAA works and whether it has become the victim of the DARTy parkers. Time will tell whether AC will be able to raise the QAA limit fast enough to stay ahead of them. Considering how much money is sitting in low-rate bank/BS accounts -- I was offered a 5-year fixed-rate bond paying 2% recently -- I expect the QAA to attract a lot of DART money. I can't help wondering, though... The QAA allows AC to take money in from investors and use some of it to fund loans while keeping some in cash to ensure liquidity so that their investors can earn interest while enjoying instant access. Whereas our heavily regulated banks do... what appears to me to be very nearly exactly the same thing. I'm sure that AC have had the QAA arrangements blessed by their compliance team, but I don't expect banks to be happy watching this happen. Whether the banks can do anything about this is another matter. Whilst there are parallels in practice isn't it somewhat different. The banks keep a tiny percentage liquid and lend the rest many times over. The QAA is not leveraged, it's still one pound in one pound out, we just happen to prioritise liquidity and availability of funds over ultimate return thus lend a smaller percentage of the funds keeping the rest liquid. If the QAA attracts a lot of DART money then we'll either up the limits or suspect we'd create a new account to service that market (paying a little more but restricting liquidity more than the QAA).
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mikes1531
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Post by mikes1531 on Sept 16, 2015 12:08:46 GMT
If the QAA attracts a lot of DART money then we'll either up the limits or suspect we'd create a new account to service that market (paying a little more but restricting liquidity more than the QAA). I think that would be a real winner for AC!
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Post by chris on Sept 16, 2015 12:12:44 GMT
If the QAA attracts a lot of DART money then we'll either up the limits or suspect we'd create a new account to service that market (paying a little more but restricting liquidity more than the QAA). I think that would be a real winner for AC! We have the systems to do it now. This release represents a 75% rewrite of the core code powering the site, with equivalent complexity to launching a new platform from scratch, and now gives us a lot more control and flexibility. Down to the business types now to define what our product portfolio looks like.
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shimself
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Post by shimself on Sept 16, 2015 13:25:15 GMT
If the QAA attracts a lot of DART money then we'll either up the limits or suspect we'd create a new account to service that market (paying a little more but restricting liquidity more than the QAA). No need whatsoever to pay more than 3.75 to attract DARTs. 1.65 is top rate today (with FSCS).
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webwiz
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Post by webwiz on Sept 16, 2015 17:13:33 GMT
If the QAA attracts a lot of DART money then we'll either up the limits or suspect we'd create a new account to service that market (paying a little more but restricting liquidity more than the QAA). Two separate accounts is a good idea, the QAA clearly serves two different purposes. But do not restrict liquidity on the DART fund. Instead restrict the other one to no cash withdrawals, money can only be used to fund loans. Also do not think of lowering the rate as suggested by shimself. There is no comparison between such an account and a FSCS protected one.
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Post by stuartassetzcapital on Sept 16, 2015 19:45:44 GMT
I thought the concept of my idle MLIA cash being swept instantly into the QAA was brilliant. Now I realise it's likely to remain entirely "conceptual" until / unless a substantial part of the QAA capacity is reserved for genuine MLIA / GEIA / GBBA account funds awaiting investment as opposed to bulk money from DARTs (Deposit Account Rate Tarts). How about launching a QAA2 that's available only to genuine AC loan investors by being restricted only to idle cash. Hi, yes that was the plan so now we have data we will continue to work to deliver that quickly, just bear with us for a week or two.
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webwiz
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Post by webwiz on Sept 16, 2015 19:56:42 GMT
If you make a DART fund it should IMO reject money when it is full, not queue it. Anyone taking a chance and sending cash when they can see it is nearly full will be taking a gamble that it might be returned which seems fair enough.
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