PACRA Broker Management Rating Assessment Framework

Analyst Contacts
Momin Farooque momin.farooque@pacra.com
October 2024
The Pakistan Credit Rating Agency
Broker Management
Rating Criteria
Assessment Framework
Table of Contents
Introduction..................................................... 2
Rating Framework ........................................... 3
Ownership....................................................... 4
Governance..................................................... 5
Management ................................................... 6
Business Sustainability ................................... 9
Financial Sustainability .................................10
Summary
PACRA’s Broker Management Rating aims to facilitate investors to differentiate between brokers on the basis of the quality of management and services provided. The brokerage industry is characterized as very dynamic and volatile due to its direct dependency on the performance of capital markets. PACRA’s analysis is based on a mix of qualitative and quantitative factors, namely: Ownership, Governance, Management, Business Sustainability, and Financial Sustainability. The relative importance of each of these criteria varies depending on its potential to impact the overall profile of the brokerage firm. This methodology applies to brokers licensed to undertake securities broker activity under the Securities Act, 2015, and permitted to undertake futures broker activity for futures contracts based on securities and financial instruments as per section 52 of the Futures Market Act, 2016. Analyst Contacts:
Muhammad Danish Nadeem danish.nadeem@pacra.com +92 42 3586 9504 The Pakistan Credit Rating Agency:
Head Office
FB 1 Awami Complex
Usman Block, New Garden Town
Lahore
Phone: +92 42 3586 9504
Karachi Office
169/1, Street No 21.
Khayaban-e-Qasim, DHA Phase 8
DHA, Karachi
Phone: +92 346 2578624
Disclaimer: PACRA has used due care in preparation of this document. Our information has been obtained from sources we consider to be reliable but its accuracy or completeness is not guaranteed. PACRA shall owe no liability whatsoever to any loss or damage caused by or resulting from any error in such information. Contents of PACRA documents may be used, with due care and in the right context, with credit to PACRA. Our reports and ratings constitute opinions, not recommendations to buy or to sell.