Appointment of Custodian

17 February 2012

Merchant House Group plc

("MHG" or the "Group")

Appointment of Custodian

MHG is pleased to announce that Merchant Capital Ltd ("MCL"), a wholly owned subsidiary of MHG, has appointed Reyker Securities plc ("Reyker") to provide custodial and administrative services to MCL's structured products division.

The appointment of Reyker as custodian replaces Pritchard Stockbrokers Limited ("Pritchard"), which, pursuant to the first supervisory notice ("Notice") received by Pritchard from the FSA on 10 February 2012, has had its permission to carry out regulated activities removed, as announced by the Group on 13 February 2012.

MCL is pleased to be working with Reyker, which is authorised and regulated by the Financial Services Authority, is a member of the London Stock Exchange, Euroclear, and APCIMS, and is authorised by HM Revenue & Customs to conduct ISA and other business.

MHG can confirm that MCL has fully reconciled records of client monies and assets currently held by Pritchard and are working to release these assets to Reyker as soon as possible pending authorisation from the Financial Services Authority.

For further information:

Merchant House Group plc +44 (0) 20 7332 2200

James Holmes, Chairman

Merchant Capital Limited (Structured Products) +44 (0) 20 7332 2200

John Gracey / Tony King

Cairn Financial Advisers LLP +44 (0) 20 7148 7900

Liam Murray / Avi Robinson

Symvan Securities +44 (0) 20 7464 4260

Kealan Doyle / Nicholas Nicolaides

CityRoad Communications +44 (0) 207 248 8010

Paul Quade