Karachi, June 05, 2023 (PPI-OT): VIS Credit Rating Company Ltd. (VIS) has assigned initial Broker Management Rating of ‘BMR3++’ to Chase Securities Pakistan (Pvt) Limited (CSPL). Assigned rating denotes adequate management quality. Outlook on the assigned rating is ‘Stable’. Assigned rating signifies sound supervision and internal control framework. Regulatory governance, external control framework, client relationship and fair-play, HR and infrastructure, compliance and management, and financial management are considered adequate.
Rating takes note of the Company’s adequate regulatory governance framework which comprises of a two-member board representing one Board Audit Committee. Inclusion of certified and independent board members may be considered to strengthen overall governance framework and assist in formulating independent board committees. Internal control framework is considered to be sound, with internal policies and still under development given that CSPL is a new entity, improvement in the scope of the same will remain important going forward. External control framework is considered to be adequate, appointing ‘A’ category auditors from SBP’s approved list of auditors may be considered to enhance disclosure levels.
Client relationship and fair-play is considered adequate, web and mobile based trading is available for customers along with other resources however, with the Company’s website under upgradation, some client tools are available over social media. HR and IT infrastructure are considered adequate, establishing a fully integrated ERP platform along with practicing frequent disaster recovery practices may be considered to strengthen IT structure of the company. Rating also takes note of the Company’s adequate compliance and risk management framework, both functions are being overlooked by same personnel. Segregating risk management function may strengthen the organizational structure. Additionally, placing a mechanism to track and monitor non-complaint trading may be considered.
Assessment of the Company’s financial profile indicates CSPL’s ability to generate reasonable revenues in subdued market conditions. Albeit remaining on the higher side, increase in core income subsequently improved the Company’s cost to income ratio. Capitalization indicators are considered adequate given small equity base of the Company. Gearing ratio was 0.2x end-HFY23 (FY22 nil) while leverage indicator depicted increase on timeline basis. End-HFY23, leverage was 0.8x (FY22 0.4x, FY21 0.2x). Market risk was observed to be on the lower side and liquidity profile was considered to be adequate during the year. Overall business and financial sustainability indicators of the Company are considered adequate. Augmentation of revenues while managing cost to income ratio, improvement in liquidity profile and capitalization indicators will remain important for rating
CSPL is a private limited company holding Trading Rights Entitlement Certificate (TREC) granted by Pakistan Stock Exchange Limited (PSX), and is registered with SECP to provide Trading and Self-Clearing Services.
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
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