SteveT
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Post by SteveT on Jul 7, 2016 10:00:02 GMT
[Mod hat on]
Given that this thread discussion ranges widely across several platforms, not just SavingStream, and has attracted multiple posts from Assetz Capital representatives, it has now been moved over to the General Discussion board.
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pikestaff
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Post by pikestaff on Jul 7, 2016 10:27:41 GMT
The issue with client money is that platforms are only allowed to use cleared funds. Even a debit card's notification that payment has been made is not good enough, you have to have actual cleared funds in the client money bank account before they can be credited to the lender on platform. TC don't seem to be taking such a strong view as they will be allowing deposit by debit card. All of the share platforms I use allow me to deposit money by credit card and then invest it straight away. As I might buy shares in Barratt which then drop 30%+ that is money leaving the platform. TC's email says that they will not be able to credit accounts until cleared funds have been received. It does not say that debit card payments will be credited immediately. Two other points to note: 1. The fact that TC have sent this email, while others such as SS have yet to do so, suggests that they may be further down the road with the FCA. Just a thought. 2. TC have put the change in place before they have real time access to the bank account (which is "coming soon"). The only rational explanation for this is that the FCA have asked for the change and gave them no choice.
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bigfoot12
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Post by bigfoot12 on Jul 7, 2016 11:00:34 GMT
The fact that TC have sent this email, while others such as SS have yet to do so, suggests that they may be further down the road with the FCA. Just a thought. It is possible that SS and TC are different. With SS we are buying from SS, so the client money might operate differently; SS can wait for their payment until after the clients funds are cleared. A loan drawing on TC can't wait in the same way.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Jul 7, 2016 11:02:48 GMT
james What it is saying is that the platform cannot give credit or receive credit (this would entail you lending to the platform, the platform lending the money out but the platform takes the credit risk on the borrower, not you as you are only taking risk on the platform who you lent money to) in order for it to be classed as a 36H agreement. The platform can only be the conduit between the borrower and the lender where the risk of loss sits with the lender and not the platform. If it does sit with the platform, this is not a 36H and is not a P2P loan and would come under CIS rules. 36H in itself is not CIS as guided by Treasury. In simple terms, the platform cannot provide credit nor take credit to fulfil a 36H loan. It can only be the agent in the middle. Does this mean that the old SS T&Cs (and the loans issued which are still outstanding) were under CIS rules but the new T&Cs (and loans) are under 36H rules?
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Post by andrewholgate on Jul 7, 2016 11:15:55 GMT
james What it is saying is that the platform cannot give credit or receive credit (this would entail you lending to the platform, the platform lending the money out but the platform takes the credit risk on the borrower, not you as you are only taking risk on the platform who you lent money to) in order for it to be classed as a 36H agreement. The platform can only be the conduit between the borrower and the lender where the risk of loss sits with the lender and not the platform. If it does sit with the platform, this is not a 36H and is not a P2P loan and would come under CIS rules. 36H in itself is not CIS as guided by Treasury. In simple terms, the platform cannot provide credit nor take credit to fulfil a 36H loan. It can only be the agent in the middle. Does this mean that the old SS T&Cs (and the loans issued which are still outstanding) were under CIS rules but the new T&Cs (and loans) are under 36H rules? I can't say, I don't work there and don't know how they operate. The above is my interpretation of the FCA rules alongside that of my advisors at AC, it is not intended to be aimed at any particular site or lender and no inference should be taken.
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james
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Post by james on Jul 7, 2016 19:17:17 GMT
james What it is saying is that the platform cannot give credit or receive credit (this would entail you lending to the platform, the platform lending the money out but the platform takes the credit risk on the borrower, not you as you are only taking risk on the platform who you lent money to) in order for it to be classed as a 36H agreement. The platform can only be the conduit between the borrower and the lender where the risk of loss sits with the lender and not the platform. If it does sit with the platform, this is not a 36H and is not a P2P loan and would come under CIS rules. 36H in itself is not CIS as guided by Treasury. In simple terms, the platform cannot provide credit nor take credit to fulfil a 36H loan. It can only be the agent in the middle. Thanks Andrew, with that specificity to applying only to the loans that are intended to be 36H that's also my understanding. Which for example means that either of these can be at least partially 36H: Case A; 1. platform P itself provides bridging finance to the ultimate borrower B of the amount requested. 2. platform P offers the borrower's needs to lenders L under 36H agreements that are directly between the borrower B and lenders L. 3. once the value of the loans agreed between B and L matches the value of the bridging finance agreed in 1 that non-36H loan is replaced by the set of 36H loans from 2. Case B: 4. As case A but in step 2 there is not sufficient amount raised to fully repay the loan in 1 so in step 3 the borrower ends up with partly the non-36H loan and partly the 36H loans. Which in effect would tie up the platform or other funder's working capital so probably not desirable long term. Is it also your understanding that these cases could be fine for the loans that I describe as 36H and the loans that I describe as not 36H? Essentially I'm trying to clarify that we have the same understanding and that it's consistent with the way some other platforms work, providing that bridging finance then replacing it with 36H.
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sl75
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Post by sl75 on Jul 8, 2016 7:06:06 GMT
As I understand it, AC do have such a vehicle, called the "Quick Access Account". Which is all segregated as per the terms of client monies. You cannot invest in the account without having cleared funds on the platform and the QAA is not AC's cash, it is our lenders cash. We can account for every penny as to who holds what in that account. That account is not used to bridge payment gaps between someone saying they have sent money to actually having the cash. I think you are confusing the issue. I think you're missing the point somewhat I was talking about how AC use those funds rather than where they come from - AC have a pool of funds belonging to clients that they can use at their discretion to invest in new loans. SS also seem to have such a pool of funds. SS don't give as much visibility to exactly where those funds came from (my guess would be a subsidiary or associate of SS themselves, possibly the PF or similar, but could also be an underwriting panel for example), but functionally it seems to me identical to how AC seem to be using the QAA to insulate borrowers from any potential liquidity issues in the main markets. De-facto (but definitely not de-jure!), the QAA funds 'belong' to AC, as they are the ones who can invest them as they please, and who decide when and how much to sell. Even if SS don't have the precise legal structure to do it "correctly" from your interpretation of the rules, as your staff were alleging on this thread, I'm sure it could be rapidly put in place if the FCA required it.
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oldgrumpy
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Post by oldgrumpy on Jul 27, 2016 9:37:46 GMT
I just bought a bit of Holiday Cottages on the SM and triggered a negative balance of almost £150  . Never mind. Within twelve minutes SS have emailed me asking me to resolve my negative balance. I don't think SS loves me any more   |
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Liz
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Post by Liz on Jul 27, 2016 9:51:01 GMT
I just bought a bit of Holiday Cottages on the SM and triggered a negative balance of almost £150 . Never mind. Within twelve minutes SS have emailed me asking me to resolve my negative balance. I don't think SS loves me any more Just block them  If nothing else, it is very efficient of them. I do wonder if they use "Monkeychimp" for e-mails, and are discriminating against you 
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