Pyramid scheme?

Yes, certainly. But my investment in the QAA is never going to be more than about 5% of 10% of 20% of my net worth, and will only remain there until someone in AC manages to remember how to go about getting a new loan to draw down.

I used those words as I don't make pricing decisions and therefore cannot guarantee it, but from the agreed internal pricing structure my understanding is that it shouldn't ever happen in future loans.

That is a good point and might mitigate some of the problems which I think that this policy creates.
It is simple, there is a database timestamp for when the loan was suspended anyone investing before that is hit with the 1%, anyone after isn't. Some will say "it isn't fair I was about to click", but that seems to be a defensible position. An easy solution would be to move 1% of everyone's holding to a new account the Provision Fund Protected Default Loan Account (PFPDLA) which also holds the problem loan.
There is a third way, which I think would be easiest to understand and implement, and it is used by other provision funds. The fund should buy the problem loan straight away and it becomes an asset of the provision fund.
I am not worried that I will lose money. I think it isn't highly likely, but as I don't know the size of the provision fund and the maximum holdings in any of the accounts I don't know. Should something along these lines happen I would expect that I might be able to exit in time. I do think there is a risk to AC's reputation with possibly the regulator, the press and forums such as this. It also leaves me with a somewhat vague feeling about how things work.

That all depends on who you are asking/imposing it on.



Premiums are only being paid because they have allowed automated bots to hoover up anything attractive & then resell it at a premium, which is why investors on AC asks for this NOT to be a feature on your SM, which I see now is also being (proposed to be) ignored.




You already know this beforehand & accept or don’t use them accordingly. SS deal flow is impressive & liquidity is maintained largely due to there adherence to the KISS principle & willingness to have a lender focused attitude, potential lessons to be learnt there?



Have you reviewed loan 45 Leeds recently where you have already crippled the liquidity, largely due to the decision making & miscalculations of AC?

It's still planned but requires another coding change from me that I'm struggling to make remotely.  I can wait 20 seconds for an email to send or a web page to refresh but when it's on each key press whilst trying to check things on our dev server it's a bit of a struggle.

Next Monday at the latest but I'll try and find a way to connect properly before then.

How are we ignoring that? I presume you don't know how the aftermarket divides sales amongst demand. SS have just copied that algorithm to a degree with how their pre-bids are allocated so if you invest there you should be familiar. Essentially there is no fastest finger first, the main reason bots are so effective on FC, and purchases / sales are split in favour of smaller investors over large.

We're going to have to disagree on why SS are currently successful. They've been very good at copying ideas from others and have put together a compelling case for the early adopters but their offering is not at all retail friendly, they're starting to add complexity now they're getting scale and they have to work around their problems, and their loan book is very young and untested. We do keep an eye on our competition and learn from them where we can but no one platform has hit on a magic formula yet.

Leeds is currently suspended due to a launch bug in the MLIA that needs correcting but which I'm struggling to do whilst on a poor internet connection on holiday.  It'll be tradable again soon.  But how is that related to the rest of the discussion?

Everyone can buy their fill at par as the loan draws down. If someone subsequently comes along and buys up all the loan units, providing liquidity for the sellers, and then makes a small margin by selling them on and providing liquidity for buyers then that's not a bad thing IMHO. If they sell for a premium they won't benefit from the accounts being able to invest and they won't be able to charge more than the market will bear. They could also be stuck holding a large portion of the loan if it defaults or is unpopular. It may also mean you get to exit a loan at par or at a smaller discount than otherwise because someone else is willing to provide that liquidity for a fee to whomever they sell the loan unit on to.

Their fairness algorithm just disadvantaged larger investors in favour of smaller investors. Their underwriting model pays a premium to those providing liquidity to smaller investors. If their loans start defaulting it'll be those that buy and hold instead of buy and sell or underwrite. Every model has a balance between different types of investor, you just don't personally like where we've chosen to balance things.

We can't accept Leeds into the GBBA without issuing a new series 2 GBBA and changing the investment criteria. This is also unrelated to this new software release.