Press Release
VIS Upgrades Broker Management Rating of Multiline Securities Limited
Karachi, May 25, 2022: VIS Credit Rating Company Ltd. (VIS) has upgraded the Broker Management Rating of Multiline securities from ‘BMR3+’ to ‘BMR3++’. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on March 30, 2021.
The rating signifies sound external control framework and financial management. Regulatory requirements and supervisory framework, internal controls, client relationship, HR & infrastructure, and compliance & risk management are adequate.
The assigned ratings take into account adequate regulatory requirement and supervisory framework. The board comprises of four directors including 50% independent representation. However, the Board size may be enhanced to support formation of independently represented board level committees, without repetition of the members. Moreover, the segregation of roles of CFO and Chief Compliance Officer (CCO) is important.
The ratings also take note of sound external control. The same may be strengthened further through additional disclosures in the annual accounts. Internal control framework remains adequate. Having a separate, well-documented conflict of interest policy may be considered. Client relationship remains adequate; availability of equity research reports on the website enhances client facilitation. HR & Infrastructure remains adequate; presence of a fully integrated ERP platform is noted. Compliance and risk management also remains adequate; albeit the credit limits have been tightened for institutional customers. The same may be done for retail customers to enhance the risk management framework.
The upgrade in the ratings also takes the sound financial management into account. The profits witnessed an increase on the back of higher operating revenues, capital gains on investments, and unrealized gains. Capitalization indicators are sound as debt remained low, while the equity base improved as a result of profit retention. Liquidity profile is also sound, with liquid assets of the company providing significant coverage to the total liabilities.
Multiline Securities Limited (MSL) is a public unlisted company offering share brokerage, investment and portfolio management services to both retail and foreign intuitional clients. The company’s operations are run through its registered offices in Karachi.
For further information on this rating announcement, please contact the undersigned at (021) 35311861-66 or email at info@vis.com.pk
Javed Callea
Advisor
Applicable Rating Criteria: Broker Management Ratings 2020
https://docs.vis.com.pk/docs/BMR202007.pdf