Press Release

VIS Upgrades Broker Fiduciary Rating of Chase Securities Pakistan (Private) Limited

Karachi, March 13, 2024: VIS Credit Rating Company Ltd. (VIS) has upgraded the Broker Fiduciary Rating of Chase Securities Pakistan (Private) Limited from ‘BFR3’ to ‘BFR3+’. Rating of BFR3+ denotes good fiduciary standards. Outlook on the assigned rating is ‘Stable’. Last rating action was announced on January 26, 2023.

The assigned rating signifies sound management and client services and internal controls and regulatory compliance, while ownership and governance and business and financial sustainability are considered adequate.

Chase Securities (Private) Limited was incorporated in 2021 as a private limited company. CSPL is principally engaged in the brokerage of shares. The Company caters mainly to domestic institutional and retail clients. At present, CSPL operates through its head office based in Karachi, where it provides both assisted and online trading services. The Company holds Trading Rights Entitlement Certificate (TREC) granted by Pakistan Stock Exchange Limited (PSX), and is registered with SECP to provide Trading & Self Clearing Services. External auditors of the Company are UHY Hassan Naeem & Co. Chartered Accountants. In October 24, 2023, as per the circular issued by SBP, they were upgraded to the ‘A’ category of the list of Auditors.

Assigned rating takes into account governance framework which is constrained by its board size and one board committee namely audit committee. However, as represented by the management, the Company has initiated the process of enhancing its board size and composition. In addition, existing directors are also undertaking the Directors’ Training Program (DTP), expected to be completed by June 2024. Implementation of these measures will remain important for rating. Disclosure levels are considered sound. Initiating invitations and advertisements has provided impetus to the client services of the Company. Similarly, availability of trading resources on website and social media platforms has bode well for the rating. However, improvement in client grievance procedures may further enhance Company’s client service. Moreover, outsourcing backups at third party warehouse as well as increasing disaster recovery and business continuity exercises may improve the contingency measures of the Company. Internal policies of the Company are in place. However, enhancing the scope of the same including conflict of interest policy and employee trading policy may further improve internal controls. Likewise, adding an independent risk management function may add strength to the control framework.

Assessment of financial profile of the Company indicates improvement in the Company’s operational earnings in FY23 as well as in 6MFY24. Consequently, the operational efficiency also depicted improvement, albeit remains on the higher side. Market risk of the Company is low given small proprietary book maintained by the Company. Liquidity and capitalization indicators are considered adequate. Going forward, augmentation in revenue, as well as equity base, maintenance of gearing ratio coupled with improvement in leverage as well as efficiency levels, will remain important for rating.

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


Applicable Rating Criteria: Broker Fiduciary Ratings:
https://docs.vis.com.pk/docs/BrokerFiduciary012021.pdf

VIS Issue/Issuer 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 2024 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .