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Merchant looks at new structured arm despite MC liquidation

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Merchant House Group is in talks to set up a new structured products business, Money Marketing understands.

Merchant Capital, the collapsed structured products arm of Merchant House, is currently being liquidated and owes over £1.5m to creditors.

It is not clear how Merchant House Group’s new venture is being funded but it is understood the business will be set up in partnership with another investment firm.

In November, Merchant House Group cancelled trading on the Alternative Investment Market after failing to raise sufficient funding.

It has declined to comment on the venture.

In February 2012, Merchant Capital was hit when the FSA suspended former custodian Pritchard Stockbrokers from regulated activities. All £350m of clients’ non-cash assets were transferred to new custodian Reyker Securities in March.

News of Merchant House Group’s plans to set up a new structured product business follows a move by Reyker to enter the structured products market.

Reyker has launched the Diversified Dual Index Kick Out plan which Money Marketing understands has been marketed to former Merchant Capital clients.

Merchant House Financial Services, the company’s IFA arm, continues to trade but the parent company has not ruled out a sale.

Lowes Financial Management managing director Ian Lowes says: “It is surprising to hear of Merchant House re-entering the structured products market under a new guise. Given the demise of Merchant Capital it may struggle to gain traction among advisers. We would expect it to ensure new investors are protected against a future demise.”

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There is one comment at the moment, we would love to hear your opinion too.

  1. NO doubt FSA/FCA will look at past performance – Oh sorry that should not be taken as a guide to the future.

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