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Merchant House structured product business under review
by Rachael Revesz on Jan 03, 2013 at 07:55
Merchant Capital, part of troubled financial services group Merchant House, is reviewing its structured product business as its administrator and custodian has terminated its contract.
Reyker Securities published a notice on its website on 21 December to inform investors of its intention to terminate its contract with Merchant Capital ‘immediately’.
‘Reyker will be making no comment about the reasons for this other than to say that we have consulted fully with the Financial Services Authority (FSA) in advance of taking this course of action. The FSA has also had prior notice of this information to investors being sent out and posted on our website. Reyker is taking this action in the belief that it is in the best interests of both investors [and] consumers who are our clients, and the firm.’
Reyker insisted it was business as usual for investors in the Merchant product plans.
Reyker added that two products, Merchant Capital FTSE Select Quarterly Income and the Merchant Capital FTSE Select Defensive Kick Out, were oversubscribed and Merchant had failed to deliver enough of the investment product to satisfy demand, and Reyker subsequently took over as plan manager.
The securities firm said it would pay investors 2% commission for these plans the week starting 21 January, and advisers awaiting their application update would be notified this week.
Reyker took over as custodian for Merchant’s structured products business after the FSA suspended Pritchard Stockbrokers in February.
Merchant Capital is a division of Merchant House Group, which also owns advisory business Merchant House Financial Services.
Merchant Capital could not be reached at the time of going to press, and Reyker Securities declined to provide further detail.
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