These are the basic facts:
Our published, long standing risk appetite as a firm is low to moderate.
Our discretionary management and advisory clients are ALL focussed on lower to moderate risk equities and treasury stock based portfolios with primarily a “blue chip stocks only” approach.
As a firm we do not take speculative principal positions.
We do not gamble our client’s money on “margined” or “leveraged” positions. Unlike banks, we do not borrow money from our investors and then speculate with it. At all. Ever.
Although we are happy to use the futures, options and bond markets on behalf of clients, this is done on a fully covered basis. We are as a house in favour of, for example Structured Investments that typically provide a degree of capital protection and a quasi interest or index yield – as long as our clients are doing this as part of a balance portfolio and fully understand the risks.
We do not deal in or trade in currencies, swaps, other complex risky derivative instruments, secondary market instruments or Exchange Traded Funds (ETFs). These are high-risk products and fall outside our risk appetite.
Nor do we deal or trade in synthetic instruments (for example instruments that are associated with position or market risk in another financial institution).
The security of Reyker as a financial institution
The media is full of stories presently about banks and financial institutions needing more capital. This is not an issue for us: we have capital that is at least double that required by our regulator, the Financial Services Authority (FSA).
To ensure that we always have enough cash we maintain a solvency ratio of two and a half times that required by the regulator. We ensure that at all times the business has substantial liquidity to cover any unforeseen eventuality – this is monitored throughout the day, every day.
The FSA requires us to provide quarterly regulatory reporting. To ensure the safety of our clients’ money and of course the firm itself we go through a full regulatory and compliance check every month – not just quarterly. Our compliance team monitor and check what dealers do. We don’t just do this when the press reports some problem in the market – we do it all the time.
We have a very strong internal control environment: for example no dealer has any access to client funds and has no ability to sell client equities or investments without it being checked by an independent back office person. Furthermore, no dealer may make any large trade acting alone – we have a strict authorisation hierarchy for everything we do.
It is simply not possible for a “rogue trader” to exist at Reyker. Our control systems prevent misuse and our supervisory system means that even Directors are accountable to an independent person who monitors the activities of the business.
We take our regulatory responsibilities extremely seriously – this is central to our business ethos. So for example the use of mobile phones in dealing rooms can provide staff with an opportunity to circumvent monitoring controls, such as recording systems. Some financial institutions are now implementing measures to record mobile phone usage. Our philosophy is very simple – we ban mobiles in our offices. Breaching any key control like this is a dismissible offence.
There is a reason why our email address is safe@reyker.com. Our ambition is to remain, at all times, a safe, reliable and absolutely trustworthy financial institution. We are extremely proud of this and we are very happy to talk to any client or prospective client about our risk philosophy and how we safeguard the assets we administer for our clients.
