DOCSLIB.ORG

Cfa Institute the State of Fintech in 2017

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Cfa Institute the State of Fintech in 2017 CFA INSTITUTE THE STATE OF FINTECH IN 2017 Sviatoslav Rosov, PhD, CFA FINTECH – WHAT IS IT? • Introduction of software into bricks-and-mortar business models. Can use experiences in other industry to predict future? • Software typically enables: • Accelerated industry development cycles Increased responsiveness to consumers. • Greater efficiency in serving consumers Fewer employees? • Free services New business models? 2 FINTECH – WHAT IS IT? • Three conceptual pillars: • Decentralisation • Disintermediation • Automation • Three technological pillars: • Marketplace Lending • Robo-advisors • Blockchain 3 WHY DECENTRALISATION? • Decentralisation allows removal of single points of failure: • No need for centralised record keeping (e.g. depositories) • No need for centralised decision making (e.g. bank lending) • More resilient to security attacks? • Fintech that decentralises: • Blockchain - can decentralise any activity. • P2P lending – decentralises capital marketplace? 4 WHY DISINTERMEDIATION? • No need for intermediaries to match forces of supply and demand. • Removes the cost of the intermediary ecosystem lower costs for consumers or higher profits for producers? • Fintech that disintermediates: • P2P lending – brings savers and borrowers into direct contact. • Blockchain – removes the need for CCPs, Brokers, Custodians, Clearing Houses and CSDs. • Robo-advisors – no need for human financial advisors? 5 WHY AUTOMATION? • Can remove the need for human labour, or free up human capital for more productive tasks. • More efficient at serving large numbers of consumers. • Fintech that automates: • Robo-advice – more efficient way of providing simple diversified portfolios. • Smart contracts – execute automatically once pre-specified conditions are met. 6 STATE OF FINTECH Let’s get an update on the three fintech areas: 1. P2P lending 2. Blockchain 3. Robo-advisors 7 STATE OF PEER TO PEER LENDING • Increasingly looking like ordinary banking/ asset management. • New entrants typically not interested in selling directly to investors (exceptions – 1G firms like Lending Club and Prosper Marketplace). • Many source institutional funding to make loans: • P2Ps apply for bank loans arguing they are serving a near-prime customer base the banks don’t serve. • Some P2Ps are applying for banking licences (e.g. Zopa). Why? 8 P2P – WHAT NEXT? • Not enough retail lenders to sustain the growth rates demanded by VC investment. Need ‘deposits’ to fund loan books. • Adopting banking/ asset management techniques to survive/ grow: • Bundled products (look like collective investment schemes!) • Provision funds (look like deposit insurance) • Redemption (look like deposits) • Graham Wellesley, founder of Wellesley & Co. says “P2P is a little bit of a red herring”, the business is more like an “…old-fashioned building society”. 9 P2P – WHAT NEXT? • Let’s look at one example – Ratesetter, one of the larger UK P2Ps. Offers investment ‘products’ that look like CIS. • Regulators: “If they look like banks why aren’t they regulated like banks?” 10 P2P – WHAT NEXT? After early enthusiasm driven by UK Treasury, the FCA has been casting a more critical eye at the industry: • Innovative Finance ISA (tax-free investment vehicle) has been delayed for a second year. • FCA consulting on tougher rules after finding “inadequate disclosures about risk and loan performance”. • Firms “testing the boundaries” of what crowdfunding regulations allow. 11 P2P – SIDE NOTE In many ways, P2P in China is unrelated to rest of world: • Scale - up to 75% of global P2P market (USD 100 billion). 20% of consumer credit. • Late-starter advantage with consumers moving from cash & no investment opportunities to online payments & P2P + savings culture. • P2P are funded by individual investors, not institutional. • To-date has been almost unregulated. Recent significant scams have led to a looming regulatory wipe-out for majority of P2P firms. 12 STATE OF BLOCKCHAIN • 2 years ago, Bitcoin’s design-issues caused industry to pivot towards alternatives based on underlying blockchain tech: • “Bitcoin bad, blockchain good” • The industry’s version of Bitcoin is the permissioned blockchain. • But… as commercialisation has stalled, another change in mood can be detected: • “Blockchain is boring, let’s look at Bitcoin again!” 13 PERMISSIONED BLOCKCHAINS • Same idea as Bitcoin, but only known users are allowed to participate in network. • Advantages: • Faster • Scalable • Conforms to regulation • Disadvantages: • Similar to difference between intranet (better for corporates) and intranet (bigger impact). 14 BLOCKCHAIN – WHAT’S NEXT? • The Australian Stock Exchange (ASX) – leading attempt at significant commercialisation. • ASX blockchain system is ready, will make final commercial decision by end of FY 2017. • The system would have (minimum) three nodes: • ASX • Reserve Bank of Australia, and • Australian Securities and Investments Commission (i.e. regtech): 15 BLOCKCHAIN – WHAT’S NEXT? • Blockchain benefits proportional to network effects – the more users the higher the benefits. • Past attempts to cooperate on sharing databases failed. • What will overcome cultural and competitive differences this time? • Regulatory environment: • Currently, regulators agree best approach is ‘do no harm’. How long will that last? 16 BLOCKCHAIN – WHAT’S NEXT? • SWIFT is working on its Global Payments Innovation project. • Not using blockchain. • SWIFT says blockchain is not ready and not necessary to significantly improve cross-border transactions. • One of the biggest original Blockchain ‘consortiums’ R3 now is ‘Blockchain-inspired’ consortium (i.e. does not use a blockchain). 17 STATE OF ROBO ADVISORS • The UK Financial Conduct Authority (FCA) estimates 2/3 of retail financial products are purchased without advice. • Advice gap created by a ban on commission payments by producers to advisors selling funds (2012). • Retail clients don’t want to pay EUR 100s per hour for financial advice, advisors don’t want low-asset clients either! • To solve advice gap, FCA is pinning its hope on robo-advisors. Will it work? 18 ROBO ADVISORS – WHAT’S NEXT? • CFA Institute - 2016 Fintech Survey. 19 STATE OF ROBO ADVISORS • For independent robos, fees typically do not cover customer acquisition costs. • To solve this problem: • Robos are aiming to attract older/wealthier clients that are even more costly to acquire, but proportionally more profitable. • Others are working with/ selling out to incumbent managers with large client lists. 20 STATE OF ROBO ADVISORS • Wealthfront AUM $3 billion vs. Blackrock AUM $5 trillion. Chart source: US Census Bureau, TabbFORUM (TABB Group) 21 ROBO ADVISORS – WHAT’S NEXT? • ETF industry sees robos as promising distribution channel. Why? • Robo-advisors sell finite number of products (typically ETF portfolios), not ‘investment advice’ in the broader sense. • The underlying demand is for the latter. • Future of robo advice – hybrid human/robo ‘lifestyle planning’? • Betterment – the largest US robo has recently introduced the option of ‘premium’ service – a human financial advisor. 22 ROBO ADVISORS – WHAT’S NEXT? • Inevitably, basic financial advice (i.e. ETF diversification) will be given away for free. • What can you charge for? Lifestyle financial planning: • Identifying goals and what is necessary to achieve them. • Identifying psychological biases and how to overcome them. • Considering personal circumstances. • ’What if’ scenario planning. • Asset managers are actually ‘life coaches’? 23 HAS FINTECH DELIVERED? Most interesting fintech likely to be: 1. Payments technology • Apple Pay/ Android Pay • Open banking API regulations 2. Blockchain • Will anyone notice if markets/ settlement move to blockchain? 3. Robo-advice • How will it change incumbent business models? 24 CHALLENGES FOR FINTECH • Fintech is usually pitched as addressing ‘millennial’ & ‘tech-savvy’ market. • But millennials have relatively little wealth… • Why bother? To influence early adopters… • Start-up business model – growth now, profit later – risky. • VC funds ‘disruption’, not ‘improvement’. • Most fintechs will ‘exit’ via sale to incumbents? 25 CHALLENGES FOR FINTECH • As a result, we will likely see reinvention/ reform of existing institutions rather than wholesale displacement: • More efficient banking. • Cheaper asset management. • More efficient payments. • We may also see increases in financial inclusion? 26 CHALLENGES FOR FINTECH • Fintech may not be life-changing for developed world. • The ‘West’ is already ‘overbanked’ and any gains likely to be marginal. • Developing world may see the biggest impact – low-hanging fruit of financial inclusion potentially enormous. • Similar to countries bypassing telephone lines and going straight to 3G/4G mobile networks. 27 ROLE FOR REGULATORS • CFA Institute advocates in support of new technologies but not at expense of: • Market fairness/ market integrity/ investor protections • Need to ensure new businesses that look like old business model but on a smartphone do not fall through regulatory cracks. Need to manage the entry of retail players mega-brands like Amazon/ Alibaba/ Facebook into financial services. Need to ensure regulations are technologically-agnostic. 28 www.cfainstitute.org.
Load more

Recommended publications
  • Regulating On-Line Peer-To-Peer Lending in the Aftermath of Dodd-Frank: in Search of an Evolving Regulatory Regime for an Evolving Industry
    DISCUSSION DRAFT Chaffee & Rapp Washington and Lee Law Review REGULATING ON-LINE PEER-TO-PEER LENDING IN THE AFTERMATH OF DODD-FRANK: IN SEARCH OF AN EVOLVING REGULATORY REGIME FOR AN EVOLVING INDUSTRY Eric C. Chaffee* Geoffrey C. Rapp** I. INTRODUCTION Like Congress’s prior attempt to legislate a post-bubble repair and prevention strategy for the American economy, the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley),1 the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) has received a somewhat chilly response from legal academics.2 As was the case with Sarbanes-Oxley,3 however, even amid all of the proposals included for the sake of “doing something” rather than for a strong policy justification, a few nuggets of genuine value can be found. One of those, in the case of Dodd-Frank, is the opening effort to address the regulatory gap surrounding on-line peer-to- * Associate Professor of Law and Chair of the Project for Law and Business Ethics, University of Dayton School of Law; J.D., University of Pennsylvania (2002); B.A., The Ohio State University (1999). I would like to thank Christine Gall, Esq. for support and encouragement while drafting this essay. ** Harold A. Anderson Professor of Law and Values, University of Toledo College of Law; J.D. Yale Law School (2001), A.B. Harvard College (1998). Eric Johnson (Toledo ’12) provided excellent research in support of portions of this article. 1 Sarbanes-Oxley Act, Pub. L. No. 107-204, 116 Stat. 745 (2002) (codified at 15 U.S.C.
    [Show full text]
  • Dn-153040 Filed Pursuant to Rule 424(B)(3
    Filed Pursuant to Rule 424(b)(3) Registration Statement No. 333-147019 $500,000,000 Borrower Payment Dependent Notes This is a public offering to lender members of Prosper Marketplace, Inc., or Prosper, of up to $500,000,000 in principal amount of Borrower Payment Dependent Notes, or “Notes.” We will issue the Notes in a series, with each series of Notes dependent for payment on payments we receive on a specific borrower loan described in a listing posted on our peer-to-peer online credit auction platform, which we refer to as our “platform.” All listings on our platform are posted by individual consumer borrower members of Prosper requesting individual consumer loans, which we refer to as “borrower loans.” Important terms of the Notes include the following, each of which is described in detail in this prospectus: Our obligation to make payments on a Note will be limited to an amount equal to the lender member’s pro rata share of amounts we receive with respect to the corresponding borrower loan for that Note, net of any servicing fees. We do not guarantee payment of the Notes or the corresponding borrower loans. The Notes are special, limited obligations of Prosper only and are not obligations of the borrowers under the corresponding borrower loans. The Notes will bear interest from the date of issuance, have a fixed rate, be payable monthly and have an initial maturity of three years from issuance, which we may change from time to time. A lender member’s recourse will be extremely limited in the event that borrower information is inaccurate for any reason.
    [Show full text]
  • Peer-To-Peer Lending Corporate Excellence Insights
    August 2018 CORPORATE EXCELLENCE INSIGHTS We are a specialized provider of systematic Quality Investment Solutions and one of the few providers of Quality equity investment strategies worldwide. Corporate Excellence Insight is our monthly publication that includes a brief update on markets and our thoughts about major trends that are impacting the investment management industry. MARKET UPDATE: STRONG CORPORATE GROWTH Strong global economic and corporate profit growth outweighed the escalating trade tensions in July. Economic data surprised on the upside in the US, picked up in Japan while stabilized in Europe. Strong Q2 corporate results reaffirmed the estimates for double digit profit growth in 2018. $3.5bn 48.5 x11 U.S. WEEKLY JOBLESS CLAIMS HIT FIAT’S VALUE WAS MULTIPLIED WORLD'S FIRST BIG 5G DEAL MORE THAN 48-AND-A-HALF-YEAR LOW 11 TIMES THROUGH 14 YEARS T-Mobile US named Nokia to supply it The number of Americans filing for Sergio Marchionne, the executive who with next-generation 5G network gear, unemployment benefits dropped to a more rescued Fiat and Chrysler from bankruptcy marking the world’s largest 5G deal so far than 48-1/2-year low in July as the labor after taking the wheel of the Italian and concrete evidence of a new wireless market strengthens further, however trade carmaker in 2004 and multiplied Fiat’s upgrade cycle taking root. tensions are casting a shadow over the value 11 times through 14 years, has died economy’s outlook. aged 66. MONTHLY TOPIC PEER-TO-PEER LENDING Central banks in Europe and the United States got into the rate increasing stance, but the levels are still low and the pace of rate increase is very moderate.
    [Show full text]
  • Prosper Marketplace, Inc. (Exact Name of Registrant As Specified in Its Charter)
    UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2009 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 333-147019 Prosper Marketplace, Inc. (Exact name of registrant as specified in its charter) Delaware 73-1733867 (State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.) organization) 111 Sutter Street, 22nd Floor San Francisco, CA 94104 94104 (Address of principal executive offices) (Zip Code) (415) 593-5400 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which Registered None None Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
    [Show full text]
  • Prosper Marketplace Ca, Inc
    THESE NOTES ARE ONLY BEING OFFERED AND SOLD TO LENDER MEMBERS WHO ARE RESIDENTS OF THE STATE OF CALIFORNIA AND WHO SATISFY THE FINANCIAL SUITABILITY REQUIREMENTS SET FORTH IN THIS PROSPECTUS. PROSPER MARKETPLACE CA, INC. $250,000,000 Prosper Borrower Payment Dependent Notes $250,000,000 Open Market Borrower Payment Dependent Notes This is a limited public offering being made to lender members of Prosper Marketplace CA, Inc., or Prosper, who are residents of the State of California, of up to $250,000,000 in principal amount of Prosper Borrower Payment Dependent Notes, or “Prosper Borrower Notes,” and up to $250,000,000 in principal amount of Open Market Borrower Payment Dependent Notes, or “Prosper Open Market Notes” issued by Prosper. The Prosper Borrower Notes and the Prosper Open Market Notes are collectively referred to as the “Notes” in this Prospectus. We will issue the Notes in a series, with each series of Notes dependent for payment on payments we receive on a specific borrower loan described in a listing posted on our peer-to-peer online credit auction platform, which we refer to as our “platform.” Two types of listings appear on our platform: (1) listings posted by individual consumer members of Prosper requesting individual consumer loans, which we refer to as “Prosper borrower loans,” and (2) listings posted by financial institutions registered with Prosper setting forth the terms of existing loans and retail installment sale contracts owned by the financial institutions and offered for sale to Prosper, which we refer to collectively as “open market loans.” The Prosper Borrower Notes are dependent for payment on Prosper borrower loans, and the Prosper Open Market Notes are dependent for payment on open market loans.
    [Show full text]
  • The U.S. Online, Non-Bank Finance Landscape
    The U.S. Online, Non-Bank Finance Landscape Jackson Mueller Executive Summary Advances in computing power and the shift toward a digital economy within the last two decades have changed how consumers and businesses transact, interact, and access financial services. More recently, as traditional financial institutions became hesitant to lend to small business and some consumer categories, online, non-bank finance platforms are picking up the slack in those markets. The once- typical face-to-face meetings with bank representatives, complete with stacks of paperwork, is being replaced with automated processes that dramatically reduce the friction long associated with obtaining capital. This evolution has brought with it dramatically reduced costs, greater efficiencies, and an abundance of data about the borrower, creating a fertile environment for the development of online finance. Internet platforms have capitalized on the shift and harnessed the data (both public and private) to build underwriting models capable of providing a credit score based on thousands, perhaps tens of thousands, of data points on a borrower in real time. The click of a button is replacing the handshake. But who are these non-bank lenders? How do these firms operate? What sort of products do they offer? And, most importantly, how did they grow to become such a recognizable resource for credit? In the supplemental landscape to this paper, I have profiled more than 70 predominantly U.S.-based online, non-bank financing platforms seeking to answer such questions. Given the variety of business models, products, and practices associated with the non-bank financing space, it is incumbent upon regulators and policymakers to understand these distinctions in developing oversight frameworks that support innovation while ensuring sufficient protections for borrowers and investors.
    [Show full text]
  • Marketplace Lending a Temporary Phenomenon? Foreword 1
    Marketplace lending A temporary phenomenon? Foreword 1 Executive summary 2 1. What is marketplace lending? 4 2. Marketplace lending: a disruptive threat or a sustaining innovation? 8 3. The relative economics of marketplace lenders vs banks 11 4. The user experience of marketplace lenders vs banks 23 5. Marketplace lending as an asset class 24 6. The future of marketplace lending 30 7. How should incumbents respond? 32 Conclusion 35 Appendix 36 Endnotes 37 Contacts 40 Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms. Deloitte LLP is the United Kingdom member firm of DTTL. This publication has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this publication. Deloitte LLP would be pleased to advise readers on how to apply the principles set out in this publication to their specific circumstances. Deloitte LLP accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication. © 2016 Deloitte LLP. All rights reserved. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 2 New Street Square, London EC4A 3BZ, United Kingdom.
    [Show full text]
  • UC DAVIS STUDY of CALIFORNIA WOMEN BUSINESS LEADERS a Census of Women Directors and Highest-Paid Executives 2015–16
    In Partnership with UC DAVIS STUDY OF CALIFORNIA WOMEN BUSINESS LEADERS A Census of Women Directors and Highest-Paid Executives 2015–16 1 NUMBER OF WOMEN FOR EVERY 7 MEN AMONG DIRECTORS AND HIGHEST-PAID EXECUTIVES IN CALIFORNIA’S LARGEST PUBLIC COMPANIES Released November 17, 2015 Visit our website on Advancing Women in Business Leadership gsm.ucdavis.edu/women THIS PAGE INTENTIONALLY LEFT BLANK TABLE OF CONTENTS 2 Message from Interim Dean Ann Huff Stevens 3 Message from Our Partner: Marlene Williamson, CEO, Watermark 4 Methodology 5 Executive Summary 6 Trends 7 California’s Top 25: The Corporate Leaders of Gender Diversity in the Boardroom and Executive Suite 8 Women Board Directors of California’s 400 Largest Public Companies 9 - Woman Board Directors by Company 10 - Who are the Women Directors? 11 - Women Directors by Industry 12 - Women Board Directors by Company Size 13 - Women Board Directors by Location 14 - Women Board Directors: Race & Ethnicity 15 - Public Policy Impact: California Senate Concurrent Resolution 62 Urging More Women on Boards 16 Women Executives at California’s 400 Largest Public Companies 17 - Women Executives by Company 18 - Women in the Most Important Corporate Roles 19 - Women Executives by Industry 20 - Women Executives by Company Size 21 - Women Executives by Location 22 - Executive Compensation 24 San Francisco Bay Area Complete Datasets for the 2015 Study 25 Appendix A: California’s 400 Largest Public Companies Ranked by Percentage of Women Directors and Highest-Paid Executives (includes industry category and market capitalization) 31 Appendix B: Who’s Who of Women Directors and Highest-Paid Executives of California’s 400 Largest Public Companies (companies listed alphabetically, identifying women directors and executives) 39 Appendix C: 400 Companies by Location (listed county-by-county with city) Message from the Dean DEAR COLLEAGUES: The UC Davis Graduate School of Management is proud to publish our 11th annual UC Davis Study of California Women Business Leaders: A Census of Women Directors and Highest-Paid Executives.
    [Show full text]
  • Marketplace Lending Verso Nuove Forme Di Intermediazione Finanziaria?
    Quaderni FinTech Marketplace lending Verso nuove forme di intermediazione finanziaria? A. Sciarrone Alibrandi, G. Borello, R. Ferretti, F. Lenoci, E. Macchiavello, F. Mattassoglio, F. Panisi 5 luglio 2019 Nella collana dei Quaderni FinTech sono raccolti lavori di ricerca relativi al fenomeno «FinTech» nei suoi molteplici aspetti al fine di promuovere la riflessione e stimolare il dibattito su temi attinenti all’economia e alla regolamentazione del sistema finanziario. Tutti i diritti riservati. È consentita la riproduzione a fini didattici e non commerciali, a condizione che venga citata la fonte. CONSOB 00198 Roma - Via G.B. Martini, 3 t +39.06.84771 centralino f +39.06.8477612 20121 Milano - Via Broletto, 7 t +39.02.724201 centralino f +39.02.89010696 h www.consob.it e [email protected] ISBN 9788894369755 Marketplace lending Verso nuove forme di intermediazione finanziaria? A. Sciarrone Alibrandi, G. Borello, R. Ferretti, F. Lenoci, E. Macchiavello, F. Mattassoglio, F. Panisi (*) Sintesi del lavoro Il marketplace lending è uno fra i fenomeni più interessanti in ambito FinTech, non solo per la rapidità con cui negli ultimi anni, specie in Paesi diversi dall’Italia, è venuto ad espandersi in termini di volumi (sia pure ancora limitati quanto a valore assoluto), ma soprattutto per il carattere innovativo dei modelli di business in cui il fenomeno stesso si traduce: modelli in grado di mettere in discussione consolidate partizioni e categorie del settore finanziario, ponendo rilevanti questioni dal punto di vista della strategia regolatoria. Si tratta di una forma di finanziamento alternativa a quelle tradizionali e riconducibile, per un verso, all’applicazione al settore dei servizi finanziari di tecniche di intermediazione digitale sviluppate nell’e-commerce e, per un altro, al più ampio ambito del crowdfunding.
    [Show full text]
  • Peer-To-Peer Lending: a Financing Alternative for Small Businesses
    Issue Brief Advocacy: the voice of small business in government ISSUE BRIEF NUMBER 10 Peer-to-Peer Lending: A Financing Alternative for Small Businesses BY MIRIAM SEGAL, RESEARCH ECONOMIST Overview Imagine that you own a small bakery and you need $15,000 to buy a new oven. There are 15 people across the country, each of whom has $1,000 that they want to invest in a small business. The only problem is that the likelihood of meeting all of these 15 investors is fairly low—unless you use an online peer-to- peer (P2P) lending platform. Peer-to-peer lending is a relatively recent development that uses the Internet to connect individual investors with other individuals, such as small business owners, seeking to borrow money. On peer-to-peer lending websites, potential borrowers apply for credit, receive a credit rating, and post to a listing that investors view. Investors can then choose to fund part of the loan, and are repaid peri- odically until the loan matures. Peer-to-peer lending, which has grown rapidly over the past decade, offers both benefits and downsides to small business owners who are seeking capital. For example, although the credit application process is less burdensome, interest rates can be higher than with traditional bank loans. This issue brief focuses on the use of P2P loans by small businesses in the United States. Data suggest that peer-to-peer lending may be a viable financing alternative for small businesses, particularly given the post-recession credit market, although financial regulations have an impact on this potential; for example, peer-to-peer lending is only available to investors in certain states due to regulatory restrictions.
    [Show full text]
  • Peer-To-Peer Financing for Development: Regulating the Intermediaries
    \\server05\productn\N\NYI\42-4\NYI406.txt unknown Seq: 1 8-SEP-10 15:26 PEER-TO-PEER FINANCING FOR DEVELOPMENT: REGULATING THE INTERMEDIARIES KEVIN E. DAVIS* ANNA GELPERN** I. INTRODUCTION .................................. 1210 R II. OLD AND NEW CATEGORIES OF INTERNATIONAL FINANCE ......................................... 1218 R A. What Do Charities Do? ....................... 1218 R B. What Do Financial Institutions Do? ............ 1219 R C. The New Peer-to-Peer Intermediaries............. 1222 R III. Regulatory concerns ............................ 1224 R A. Interests of Donors, Depositors, and Investors .... 1226 R B. Interests of the Public in the Home State ........ 1229 R C. Interests of Recipients of Funds................. 1231 R D. Interests of the Host State...................... 1232 R E. Systemic Concerns ............................ 1236 R IV. REGULATORY RESPONSES: WHERE THE EXISTING FRAMEWORKS FALL SHORT ........................ 1238 R A. Regulation of Charities ........................ 1238 R B. Regulation of Financial Institutions ............ 1245 R C. Private Ordering ............................. 1255 R V. Policy Implications ............................. 1257 R A. Subject All Actors that Promise Financial Returns, Regardless of Charitable Status or Level of Returns, to Regulation as Financial Institutions . 1258 R B. Reform Charities Laws to Permit International Regulatory Competition........................ 1261 R * Beller Family Professor of Business Law, New York University School of Law. ** Associate Professor
    [Show full text]
  • PORTFOLIO of INVESTMENTS Columbia Variable Portfolio – U.S
    PORTFOLIO OF INVESTMENTS Columbia Variable Portfolio – U.S. Government Mortgage Fund, March 31, 2021 (Unaudited) (Percentages represent value of investments compared to net assets) Investments in securities Asset-Backed Securities — Agency 0.0% Asset-Backed Securities — Non-Agency (continued) Coupon Principal Coupon Principal Issuer Rate Amount ($) Value ($) Issuer Rate Amount ($) Value ($) United States Small Business Administration Pagaya AI Debt Selection Trust(a) Series 2001-20H Class 1 Series 2019-3 Class A 08/01/2021 6.340% 464 470 11/16/2026 3.821% 2,232,056 2,265,623 Total Asset-Backed Securities — Agency Prosper Marketplace Issuance Trust(a) (Cost $464) 470 Series 2019-3A Class B 07/15/2025 3.590% 2,000,000 2,006,629 Asset-Backed Securities — Non-Agency 4.8% Subordinated Series 2017-1A Class C AIMCO CLO 11 Ltd.(a),(b) 06/15/2023 5.800% 215,331 216,086 Series 2020-11A Class D Subordinated Series 2017-2A Class C 3-month USD LIBOR + 3.650% 09/15/2023 5.370% 430,429 430,528 Floor 3.650% (a),(b) 10/15/2031 3.875% 2,300,000 2,303,554 RR 3 Ltd. Series 2014-14A Class A2R2 (a),(b) Apidos CLO XXVIII 3-month USD LIBOR + 1.400% Series 2017-28A Class B Floor 1.400% 3-month USD LIBOR + 1.700% 01/15/2030 1.641% 3,750,000 3,735,390 Floor 1.700% (a) 01/20/2031 1.924% 4,125,000 4,125,210 SoFi Consumer Loan Program Trust Series 2018-3 Class B (a),(b) Carlyle Global Market Strategies CLO Ltd.
    [Show full text]