Welcome to the new Rolling market!

I am delighted to say that the changes to simplify the Rolling market, which we announced at the start of May, came into effect, as planned, on 6 June.
The new Rolling market keeps the features that investors value most, while making it even easier to put your money to work. In this blog is a reminder of the key features.

Funds already invested in the Rolling market

On 6 June, the monthly roll of matched loans stopped. This means that, from this date, investments in the Rolling market remain matched to borrowers for the full duration of the loan contract, at the same consistent rate of interest until the loan is fully repaid. The rate of interest is the last rate at which the funds were matched before 6 June.

Reinvestments

As monthly repayments from borrowers are received by investors, repayments are automatically reinvested. This ensures that funds are immediately put back to work so your earnings compound. Reinvestments are set at the Market Rate which means that they will be matched as quickly as possible.

You can choose to stop the interest element of borrower repayments from being automatically reinvested. You can do so by logging in, selecting “Instructions” and then “Reinvestment”, and changing the setting for reinvestment of interest from the Rolling Market to “Holding Account”. From the Holding Account, funds can be invested as new money, or withdrawn to your bank account. Investors that wish to automatically reinvest their interest can do so via the same process.

Investors who had opted for capital and interest to be repaid to their Holding Account prior to 6 June, will notice that now interest is being returned to the Holding Account and capital is reinvested.

New investments

People investing new money into the Rolling market can choose either the prevailing Market Rate or set their own rate. New money is invested from available funds in the Holding Account.

Access to invested capital

The Rolling market is our most flexible investment market. The changes to the Rolling market have no impact on how investors can access capital they have invested. Access continues to be free of fees and, as always, remains subject to RateSetter being able to transfer matched loans to another investor. Matched loans are transferred to other investors in the chronological order that they were matched, starting with the most recently matched contract.

We have introduced a Fair Usage policy to protect the integrity of the Rolling market. This creates an investment pause of 14 days following the withdrawal of capital from the market.

Risk

The simplification of the Rolling market does not change the credit risk of investing. At a platform level, we believe that we are reducing the risk of not being able to access your funds when you want them because we are ensuring that money does not leave the system unintentionally.

The following Q&A is in addition to the Q&A in our blog on 1 May

What will the impact be on rates in the Rolling market?

We expect that rates will be more predictable.

For how long can my money be matched to a single loan in the Rolling market?

Money in the Rolling market has always been matched to loans with terms from 6 months to 5 years. This is unchanged. The monthly roll of matched loans has stopped and funds invested in the Rolling market are now being matched to borrowers for the full remaining duration of their loan. So the monthly roll now affects reinvestments. Access to invested funds continues to be free of fees, and remains subject to RateSetter being able to transfer matched loans to another investor.

What happens to money matched to loan contracts which were due to roll between 6 June and 6 July?

For these loan contracts the interest rate received by investors will remain the same as it was before 6 June. The funds are now being matched for the full remaining duration of the loan, at that same interest rate.

What happens to capital and/or interest repayments of less than £10?

This is unchanged. The minimum investment that can be matched to a loan is £10. Capital repayments below £10 automatically go into the Holding Account. From there they are treated in accordance with an investor’s reinvestments settings.

If you have requested that funds are reinvested, once the total balance of capital reached £10 it will be reinvested at the market rate. Alternatively, you can leave the funds in your Holding Account, or withdraw them to your bank account.