UK structured products distributor Reyker Securities has stopped all activities following financial difficulties.
Reyker Securities, a UK provider of white label offerings and private investor services, has been placed into special administration after failing to find a potential acquirer.
Until last week, the UK firm had been undertaking an accelerated sales process, but it could not complete the sale.
According to the UK Financial Conduct Authority (FCA), the directors of Reyker are taking immediate steps to place the company into special administration under the Investment Bank Special Administration Regulations 2011 though it 'remains open to potential buyers of the business, in light of its financial circumstances'.
A statement on Reyker’s website states that the company ‘continues to hold and safeguard client money and custody assets, however at this time it is not able to return these to clients’.
‘These will be dealt with by the special administrators following their appointment in accordance with the special administration regime,’ stated Reyker.
The UK regulator has imposed certain regulatory requirements effectively stopping all movement of client money or asset. Reyker is not permitted to either receive any new client money or custody assets or to pay away client money or custody assets, apart from specific circumstances such as receipt of dividend payments.
Reyker has also decided to not conduct any further business or any other regulated activities including the distribution of structured products.
The firm is a top 10 distributor in the UK retail market with more than 100 live products most of which were hedged by RBC (41) and Goldman Sachs (25). In 2018, the company sold an estimated £47.9m across 23 structures. Year-to-date, the UK distributor has marketed 13 products, including 10 FTSE 100 knockout structures and three dual index products.
The UK provider was seeking to enter the structured fund arena following the launch of the Reyker Ucits VT Real Assets fund in 2018. James Chu (pictured), head of markets and investments at Reyker, told SRP in an interview earlier this year that the fund which was already approved by the FCA had a target return of eight percent pa.
Reyker has also stopped its activities in relation to its role as the delegated investment manager of the VT Reyker Real Assets fund.
The FCA said it will remain ‘in frequent contact with Reyker’.
Reyker entered the structured products market in 2013 and became prominent in the UK structured retail products market following the disappearance of Merchant Capital and Incapital. The firm was the UK custodian and administrator with some £350m of structured product investments belonging to Merchant Capital clients.
Calls and emails to Reyker were not answered.