Merchant Capital (MCL), subsidiary of Merchant House Group, has appointed Reyker Securities to provide custodial and administrative services to its structured products division.
Reyker will replace Pritchard Stockbrokers, which stopped providing services following enforcement action from the FSA on February 10.
The FSA's supervisory notice said Pritchard had failed to arrange adequate protection for its client's assets and allowed client money to be used on its own account.
As a result, it said the company was no longer permitted to carry out any of the regulated activities listed in its part IV permissions.
Reyker is authorised and regulated by the Financial Services Authority, a member of the London Stock Exchange, Euroclear, and APCIMS, and is also authorised by HM Revenue and Customs to conduct ISA and other business.
In a statement, Reyker said: "This is a new relationship for both firms and we anticipate it will be viewed as a positive step by the market."
Merchant House Group has also confirmed MCL has fully reconciled records of client monies and assets held by Pritchard and is working to release these to Reyker as soon as possible, pending authorisation from the FSA.
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