mikes1531
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Post by mikes1531 on Nov 9, 2014 20:44:50 GMT
I think the point that small lenders are trying to make is not that there must definitely be a conspiracy among uw’s but simply that with things as they stand now it’s very difficult for us to make any judgements (& hence “informed” investment decisions). Here's a good example... Aber********* WT. This is a £960k loan. When I looked earlier today, there was £922k of that available on the Aftermarket. Later in the day the amount available had dropped by about £300k. I've just looked at it again, and it's back up to £922k available. I don't understand what's going on, so I'm not going to touch that one with a barge pole!
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Post by bracknellboy on Nov 9, 2014 22:19:19 GMT
I think the point that small lenders are trying to make is not that there must definitely be a conspiracy among uw’s but simply that with things as they stand now it’s very difficult for us to make any judgements (& hence “informed” investment decisions). Here's a good example... Aber********* WT. This is a £960k loan. When I looked earlier today, there was £922k of that available on the Aftermarket. Later in the day the amount available had dropped by about £300k. I've just looked at it again, and it's back up to £922k available. I don't understand what's going on, so I'm not going to touch that one with a barge pole! Simples. One of the UWs wanted to move £3 from their manual account to their cash account. However, not being used to dealing with such small numbers, they inadvertently put a few extra noughts on. They were not required to confirm their intent, and hence the system put £300k of a WT loan onto sale with no indication. Later the UW in question logged back in to see whether the cash for their Cappuciano had arrived in their account, realised what was happening, decided that the coffee they wanted wasn't THAT good, and in a panic reversed the never intended instruction. A few hours later they received confirmation that their decree nisi had come through. They then decided that they couldn't afford that coffee after all, but nonetheless better put that WT back on the market.
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j
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Penguins are very misunderstood!
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Post by j on Nov 9, 2014 22:24:45 GMT
Simples. One of the UWs wanted to move £3 from his manual account to his cash account. However, not being used to dealing with such small numbers, they inadvertently put a few extra noughts on. They were not required to confirm their intent, and hence the system put £300k of a WT loan onto sale with no indication. Later the UW in question logged back in to see whether the cash for their Cappuciano had arrived in their account, realised what was happening, decided that the coffee they wanted wasn't THAT good, and in a panic reversed the never intended instruction. A few hours later they received confirmation that their decree nisi had come through. They then decided that they couldn't afford that coffee after all, but nonetheless better put that WT back on the market.  
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jjc
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Post by jjc on Nov 9, 2014 22:57:52 GMT
Not sure I follow you. P2P loans (as they stand now) would not be as easy, you're right. Which is exactly why the govt is looking at how secondary markets could help make this (& other things) easier.
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bigfoot12
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Post by bigfoot12 on Nov 9, 2014 23:20:32 GMT
...and you will have to give it your AC password... Umm... Isn't that a violation of the AC Ts&Cs? You don't tell me your password, you enter it into the program which will use the API. It needs it to pull information about your account. Now you enter your password into Firefox or Chrome. But if you can't trust the program...
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pikestaff
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Post by pikestaff on Nov 10, 2014 11:48:46 GMT
... For those who didn’t know, HM Treasury & the FCA are also actively seeking to promote effective AM’s with P2P operators. In their ongoing ISA-P2P consultation they are even looking at the possibility of setting a maximum period of time for which a loan must be traded if the investor so desires (or bought up by the platform/3rd party). "The government could require that for a peer-to-peer loan to be ISA-qualifying, it must be facilitated by a firm operating a platform that provides a facility for the investor to seek a third party purchaser for the loan, throughout the term of the loan. In other words, it must provide access to a secondary market at all times."
"The government could address this by insisting that, for a peer-to-peer loan to be ISA eligible, there must be arrangements in place under which the loan could be sold at market value within a specified period (say, twenty days) at the investor’s request."
"One way firms operating platforms could achieve this would be for them to put in place a contractual commitment that either the firm itself or a third party would offer to purchase loans from investors at their market value if they remain unsold after a specified period. This would ensure that loans could be sold (and therefore transfers of the cash realised could take place) within a reasonable time period, even where either no secondary market existed, or where no willing buyer had been found via such a market
."So, whilst nothing has (yet) been decided the direction of travel – both for business-driven & regulatory reasons - is very clear. The suggestion that platforms might be obliged to be, or to provide, a buyer of last resort is preposterous and shows how little the FCA understands p2p. 1. The platforms don't have the capital to do it themselves. They would need to add a load more capital, and basically turn themselvers into a bank. That's not going to happen. 2. If the buyer of last resort was an institution with the necessary capital, such as a bank or insurance company, it would need to set capital aside and would charge richly for the privilege, as a commitment fee. I'm guessing at least 1% pa on the whole loan. Is that what we want? 3. Having done either of the above, you would create the "run on the bank" problem which does not exist at present because lenders understand (or should understand) that they are locked in if there are no buyers. 4. What is market value anyway? Even on FC, which is the most liquid market, I'd find it hard to say what market value was. Especially if everybody wanted out at once. And what about loans in default? IMO the lender lock in (if there are no buyers) is fundamental to p2p and must be kept if it is to work.
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Nov 10, 2014 18:15:02 GMT
The suggestion that platforms might be obliged to be, or to provide, a buyer of last resort is preposterous and shows how little the FCA understands p2p. 1. The platforms don't have the capital to do it themselves. They would need to add a load more capital, and basically turn themselvers into a bank. That's not going to happen. 2. If the buyer of last resort was an institution with the necessary capital, such as a bank or insurance company, it would need to set capital aside and would charge richly for the privilege, as a commitment fee. I'm guessing at least 1% pa on the whole loan. Is that what we want? 3. Having done either of the above, you would create the "run on the bank" problem which does not exist at present because lenders understand (or should understand) that they are locked in if there are no buyers. 4. What is market value anyway? Even on FC, which is the most liquid market, I'd find it hard to say what market value was. Especially if everybody wanted out at once. And what about loans in default? IMO the lender lock in (if there are no buyers) is fundamental to p2p and must be kept if it is to work. Can I ask whether you will be contributing to the consultation process to make these points? Providing an AM is a reasonable requirement, but not one with guarantees. The more p2p has to behave like a bank, the more overheads, the more the returns will go down, and then the whole point of even having them within an ISA could easily be eroded.
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jjc
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Post by jjc on Nov 10, 2014 21:20:25 GMT
I actually agree with many of your views pikestaff. But I think it’s still too early to call exactly how things will pan out. There are lots of (also big institutional) interests at stake here, & personally I wouldn’t be surprised if things took an unexpected turn or two.
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pikestaff
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Post by pikestaff on Nov 11, 2014 7:43:32 GMT
Can I ask whether you will be contributing to the consultation process to make these points? Providing an AM is a reasonable requirement, but not one with guarantees. The more p2p has to behave like a bank, the more overheads, the more the returns will go down, and then the whole point of even having them within an ISA could easily be eroded. You are right, I should and I will. Hopefully a few others will make similar points...
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niceguy37
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Post by niceguy37 on Nov 11, 2014 9:48:17 GMT
Can I ask whether you will be contributing to the consultation process to make these points? Providing an AM is a reasonable requirement, but not one with guarantees. The more p2p has to behave like a bank, the more overheads, the more the returns will go down, and then the whole point of even having them within an ISA could easily be eroded. You are right, I should and I will. Hopefully a few others will make similar points... I agree that an after-market is a very reasonable requirement. I think the government should cap fees for the AM at, perhaps 0.25%. But guaranteeing an exit is not reasonable, and sounds more like an attempt by vested interests to curb the P2x market place.
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bigfoot12
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Post by bigfoot12 on Nov 11, 2014 13:42:49 GMT
You are right, I should and I will. Hopefully a few others will make similar points... I agree that an after-market is a very reasonable requirement. I think the government should cap fees for the AM at, perhaps 0.25%. But guaranteeing an exit is not reasonable, and sounds more like an attempt by vested interests to curb the P2x market place. I certainly intend to respond. My preference is to have as few rules as possible that might stifle innovation. Zopa, for example, convert a non-Safeguard loan into a Safeguard when it is sold on their after market. I think that allowing competing ideas is probably best. As long as all fees, and everything else is made clear then I think that the state should do as little as possible for now.
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