The FSCS has said it will assess claims against Merchant Capital Ltd.
The compensation fund said it had received claims against Merchant Capital in relation to charges deducted from maturity proceeds of certain structured investments by Reyker Securities.
A statement from the FSCS said: “We are working to finalise a process for these claims.
“We expect to be in a position to publish full information on our website by the end of November about what affected customers need to do to claim from FSCS.”
The FSCS declared Merchant Capital Ltd in default in April 2014 after it was placed in creditors’ voluntary liquidation in 2013.
Right to Reply
In a letter to investors, Reyker said: “Following the collapse of Merchant Capital Ltd shortly after the regulatory authority the FCA withdrew permissions for it to trade, it was necessary for Reyker to implement charges for the custody, administration and management services that we provide in respect of structured product plans that were either promoted or managed by Merchant.
“In many cases the structured investment products were provided by former distributors, who had previously failed, Keydata and Arc being well known examples among several, and subsequently managed by Merchant in some capacity as, in effect, a successor firm.
“Reyker has never had this contractual responsibility to manage the plans, although we have fulfilled this role out of goodwill to clients and in order to protect the investments and income.”
