Karachi, August 05, 2021 (PPI-OT): VIS Credit Rating Company Ltd. (VIS) has assigned initial Broker Fiduciary Rating of ‘BFR3’ to FDM Capital Securities (Private) Limited (FDMCSPL). Rating of BFR3 denotes good fiduciary standards. Outlook on the assigned rating is ‘Stable’. The rating signifies adequate governance framework, business and financial sustainability and management and client services while internal controls are considered sound.
Rating takes into account FDMCSPL’s adequate ownership and governance framework which is largely constrained due to limited board size. Enhancing the board size and inclusion of certified and independent directors may facilitate formation of independently represented committees and improve overall governance framework. Management and client servicing is also at adequate levels. The same may be strengthened through integrating all functional platforms and improving customer grievance procedures and communications. Internal control framework was observed to be sound with respect to scope of policies and measures being in place for preserving client’s data confidentiality. Company is also in the process of updating their trade review policy.
During FY20, company’s profitability profile witnessed significant improvement due to increase in core brokerage income which further improved during HFY21. Consistent increase in recurring income has improved efficiency ratio significantly. Capitalization indicators are at manageable levels. Overall, company’s business and financial sustainability remains adequate; however significant dependence on brokerage segment is a rating constraint. Diversification in revenue streams may be considered.
FDMCSPL is a private limited company principally engaged in brokerage of shares in ready and future market to local retail and institutional clients. The company holds a Trading Right Entitlement Certificate (TREC) for Trading and Self-Clearing services issued by the Pakistan Stock Exchange Limited (PSX).
For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/