Merchant assures over assets as it appoints new custodian

Merchant Capital has confirmed that it has appointed Reyker Securities as a new custodian for client monies in its structured products division, a week after previous custodian Pritchard Stockbrokers had its permissions removed by the Financial Services Authority.

In a statement, Merchant also sought to assure investors that it “maintains a complete and accurate record of all of its structured product client assets”.

The firm said it has “a fully reconciled statement of the client money held in its segregated client account at Pritchard” and says it has sent all relevant information to the FSA to help with the transfer of funds to Reyker.

Merchant House, parent company of Merchant Capital, issued a statement to the stock exchange last week confirming that clients may suffer economic losses as a result of the supervisory notice, which prevents Pritchard from carrying out any regulated activities except to close transactions which have already commenced..

The regulator accused Pritchard of breaching regulation in regards of the firm’s handling of client assets, which the FSA alleges were used in its own accounts.

Separately, Merchant Capital on Friday (17 February) launched Merchant Wealth, which will act as a new distribution channel to raise capital for the company’s structured products and funds.

Led my managing director Tom Evans, Merchant Wealth will include existing stockbroking and corporate broking services of the group.