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Merchant House structured product future in doubt as custodian severs ties
by Emma Dunkley on Jan 02, 2013 at 14:32
Reyker Securities, the administrator and custodian for structured products provider Merchant Capital, has terminated the relationship with immediate effect.
The custodian said in a note it had ended its contract with Merchant Capital, providing services to the firm and its many thousands of structured products investors, as well as its parent company Merchant House Group.
The group said: ‘Reyker has decided that it can no longer continue to provide any services to Merchant and accordingly we have entirely ceased our business relationship with Merchant immediately.
‘Reyker will be making no comment about the reasons for this other than to say that we have consulted fully with the FSA [Financial Services Authority] in advance of taking this course of action.’
Reyker took on the role after Pritchard Stockbrokers entered administration early in 2012. This came shortly after the Financial Services Authority issued a supervisory notice to the firm, preventing it from undertaking further regulated activities.
There is speculation Merchant Capital could be wound down, although the firm was unavailable for comment.
Reyker said its withdrawal from the partnership will see all client money and invested assets remain in its custody bank accounts and investment depots, and emphasised this is ‘securely ring fenced.’
It added there will be no change to the service Reyker provides to investors.
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