Merchant Capital Limited

1. What is FSCS’s role in relation to Merchant Capital?

Merchant Capital was placed into creditors’ voluntary liquidation in February 2013. FSCS then declared Merchant Capital in default in April 2014. This meant that FSCS could pay compensation in relation to eligible claims against the firm.

Return to top

2. What protection does FSCS provide?

FSCS can pay compensation to eligible customers up to £50,000 per person for claims against Merchant Capital relating to investment business conducted by the firm.

Return to top

3. What type of claim can FSCS consider in relation to Merchant Capital?

FSCS can consider any claim against Merchant Capital in relation to investment business conducted by the firm. To accept a claim FSCS must be satisfied that the firm is liable for a claimant’s financial losses. In October 2015, FSCS announced that it could accept claims in relation to charges deducted by Reyker Securities PLC from certain investments where Merchant Capital was the plan manager.

Return to top

4. Why can FSCS pay compensation in relation to charges deducted by Reyker Securities PLC?

Merchant Capital was the plan manager of around 230 structured investments.  It also took responsibility for managing other products from plan managers such as Keydata Investment Services Limited, Arc Capital & Income PLC and Dawnay Day Quantum.

Separate companies were responsible for providing safe custody of the structured products managed by Merchant Capital, including Reyker Securities PLC from March 2012. Reyker Securities PLC was responsible for the ongoing administration of the structured investments, and the administration of income and maturity payments.

When Merchant Capital was plan manager it agreed to cover costs in relation to the administration and safeguarding of the investments for some plans. However, when it failed in February 2013 it could no longer meet those costs which are now deducted from maturity proceeds paid to investors.

FSCS believes in certain circumstances Merchant Capital is liable for costs to investors where Merchant Capital contracted with investors that no additional costs would be incurred during the lifetime of the investment for standard administration and safeguarding of investments.

Return to top

5. How do I claim with FSCS against Merchant Capital?

Customers who believe they may have a valid claim should visit our Online Claims Service.

Return to top

6. What evidence do I need to support my claim?

Along with the completed FSCS application form, you will need to send evidence of charges deducted from the maturity proceeds by Reyker Securities PLC when your investment matured. For example, the maturity statement or invoice which details the charges. In addition, if you still have a copy of the investment brochure which includes the terms you agreed to when you originally made your investment, you should also send a copy of that to FSCS.

Return to top

7. Can I claim if my investment has not yet matured?

We won’t be able to determine what charges will be deducted from your investment until your plan matures. You should therefore wait until your plan matures before making a claim. The last affected plan matures in 2018.

Return to top

8. How long will FSCS take to deal with my claim?

FSCS aims to complete the majority of claims within six months of receiving a completed application form.

Return to top

9. When and how will I receive compensation from FSCS?

If your claim is eligible, we will pay compensation directly to your nominated bank account or by cheque.

Return to top

10. How will FSCS calculate my compensation?

FSCS will compensate customers based on the charges deducted by Reyker Securities PLC at maturity of your investment. 

Return to top