Post by mikes1531 on Oct 8, 2015 3:01:31 GMT
Oct 7, 2015 13:33:07 GMT sl75 said:
My best guess: the QAA can act as an underwriter (using its uninvested cash), so that they don't need to wait for REAL underwriters before progressing legals to the stage where actual funds on deposit are required (as the QAA already has such funds). They'll then hope that real underwriters will displace the QAA and allow it to use its funds to underwrite the next loan, but if not, the QAA will have to offload any excess holdings in the market just like the real underwriters.In effect, it would make the QAA an "underwriter of last resort".
If that is the case though, it's unclear how the same funds can be simultaneously ring-fenced to underwrite a particular loan and also ring-fenced to allow instant withdrawals from the QAA.
When idle funds are sitting in cash, they ought to be locked up in AC's client money account -- where they're no use to AC. If, OTOH, the idle funds are in the QAA, then they're not really idle -- which might give AC the power to use them for working capital.
Then again, AC just raised £3M of equity money. Some of that will be spent increasing staff and for marketing -- once they have something to sell, of course -- but a lot of that could be used as working capital until it's needed for other projects. If it saves underwriting fees, it would help AC's bottom line.
