Karachi: VIS Credit Rating Company Ltd. has reaffirmed the Broker Fiduciary Rating of Darson Securities (Private) Limited at BFR3+, indicating good fiduciary standards with a stable outlook. The previous rating action was announced on December 28, 2023.

The rating reflects adequate business and financial sustainability, alongside a satisfactory ownership and governance framework. The Company’s internal controls and regulatory compliance are considered sound, with strong management and client services.

Darson Securities has been providing brokerage services for over two decades, catering to both retail and foreign institutional clients. Operating from its corporate office in Karachi and a registered office in Lahore, the Company maintains a network of 10 branches across the country. It holds a Trading Right Entitlement Certificate from the Pakistan Stock Exchange since 2000, authorizing trading and self-clearing services. The Company’s external auditors are categorized as ‘A’ on the State Bank of Pakistan’s approved list.

The rating acknowledges the Company’s governance framework, comprising a three-member board lacking independent representation. The board has four committees with identical membership. Expanding the board to include independent directors could enhance governance and diversify committee perspectives. Client services are strong, but investor grievance procedures could be improved. Disaster recovery measures could benefit from outsourcing offsite backups.

Financially, Darson Securities experienced a strong rebound in profitability in FY24, fueled by increased brokerage revenues and industry volume surges, continuing into the first half of FY25. This led to improved operational efficiency. The Company’s liquidity profile is adequate, with low market risk and nominal debt, contributing to a solid capitalization profile. Future rating stability will depend on revenue diversification, operational efficiency, and maintaining market risk and leverage ratios.