Press Release

VIS Assigns Initial Broker Fiduciary Rating to FDM Capital Securities (Private) Limited
 

Karachi, August 5, 2021: 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 & Self Clearing services issued by the Pakistan Stock Exchange Limited (PSX).

For further information on this rating announcement, please contact Ms. Sara Ahmed (Ext: 207) or the undersigned (Ext: 306) at (021) 35311861-66 or email at info@vis.com.pk


Faryal Faheem Ahmed
Deputy CEO

Applicable Rating Criteria: Broker Fiduciary Ratings 2021 https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/BrokerFiduciary012021.pdf

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Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited