Press Release

VIS Reaffirms Broker Management Rating of FDM Capital Securities (Private) Limited

Karachi, April 15, 2025: VIS Credit Rating Company Ltd. (VIS) has reaffirmed Broker Management Rating of FDM Capital Securities (Private) Limited at ‘BMR3++. Outlook on the assigned rating is ‘Stable’. Last rating action was announced on March 15, 2024.

The assigned rating signifies strong external control framework, sound compliance and risk management practices as well as satisfactory client relationship and fair play, while regulatory compliance, supervision framework, internal control framework, HR and infrastructure along with financial management is considered adequate.

FDM Capital Securities (Private) Limited (FDMCSL) was incorporated in July 2001 and is principally engaged in brokerage of shares in ready and future market for local retail clients. The Company holds Trading Rights Entitlement Certificate (TREC) for Trading & Self Clearing Services granted by Pakistan Stock Exchange Limited (PSX) and has also acquired membership of the Pakistan Mercantile Exchange Limited & Commodities Exchange (PMEX.) The Company operates from its registered office located at Pakistan Stock Exchange Building in Karachi, Pakistan. External auditors of the Company are M/s Rahman Sarfaraz Rahim Iqbal Rafiq – Chartered Accountants. External auditors are in category ‘A’ of the approved list of auditors published by the State Bank of Pakistan (SBP).

Assigned rating takes into account the governance framework, with room for improvement by increasing the size of the board, along with inclusion of independent and certified directors, thereby facilitating formation of additional board committees with a more diverse composition. Internal policies of the Company are in place. Also, enhancement scope of the existing policies along with devising a separate conflict of interest policy may further enhance the internal control and regulatory compliance frameworks. External control framework of the Company is supported by strong disclosure levels. The rating also takes into account the Company’s client relationship and facilitation, with established trade channels enabling seamless execution of transactions. Moreover, user-friendly investor grievance procedures with greater visibility on the website would reflect positively on customer relationship. Additionally, enhanced marketing and promotion efforts would contribute towards expansion of customer base. Contingency measures of the Company may be further strengthened by outsourcing offsite backups to a third-party warehouse and increasing the frequency of disaster recovery exercises. Compliance and risk management is considered sound, however, establishing a separate risk management function may further enhance the same.

Assessment of the Company's financial profile reflects a rebound in its profitability in FY24 as well as 6MFY24, driven by higher brokerage revenues amid a surge in market activity, along with higher unrealized capital gains. Consequently, the operational efficiency recorded a notable improvement to a moderate level. The Company’s market risk is assessed as moderate while the liquidity profile of the Company is considered sound. The capitalization profile is supported by debt free balance sheet. Going forward, enhancing, and diversifying revenue base, along with improvement in market risk as well as maintenance of operational efficiency, liquidity profile and capitalization indicators will remain important for the assigned rating.

For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.

Applicable Rating Criteria: Broker Management Ratings:
https://docs.vis.com.pk/Methodologies%202024/Broker-Management.pdf
VIS Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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 2025 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .