Rating Details	Rating Type	BFR
	Dissemination Date	Current (23-Jun-23 )	Previous (24-Jun-22)
	Action	Maintain	Maintain
	Rating	BFR 2	BFR 2
	Outlook	Stable	Stable
	Rating Watch	-	-

Rating Rationale	Factor	Comment
	Ownership	Controlling stakes are owned by Mr. Syed Muhammad Ismail Abbasi who owns ~69.7% of the ownership.
	Governance	ACPL has appointed three directors on the board consisting of family members.
	Management and Client Services	The Company has a well-developed organizational structure and an experienced management team resulting in sound client services
	Internal Controls and Regulatory Compliance	An outsourced internal audit and a dedicated risk and compliance department ensure adherence to regulatory compliance
	Business Sustainability	A major part of revenue emanates from equity brokerage, however, engagements with PMEX have been revamped while also providing MTS services.
	Financial Sustainability	The presence of prop-book results in market risk exposure. Leverage-free capital structure brings comfort to the rating.

Key Rating Drivers

Abbasi and Company (Pvt.) Limited ("ACPL" or the “Company") is one of the pioneers of the brokerage industry in the northern region primarily serving the HNWIs. The rating incorporates a well-designed organizational structure with proper departmentalization and clearly defined responsibilities. The management carries a good educational profile and possesses the necessary experience to manage business operations efficiently. Recently, they have revamped their website and mobile application “Trade In” with a user-friendly interface to provide clients with the facility of online trading while a research department is also present. A dedicated customer support department resolves the client’s grievances. The rating reflects a strong internal control environment supported by well-defined policies and outsourced internal audits. An independent compliance department ensures adherence to regulatory compliance. The presence of an independent risk management function is a strengthening factor. The rating accounts for a sound ownership structure and the strong business acumen of the CEO, Mr. Muhammad Ismail Abbasi. The governance framework may be improved further with an increase in the board size and independent insight. Brokerage revenue has declined for 1HFY23 due to a fall in market volumes, leaving an impact on profitability. Diversification may be observed in the form of MTS services and revamping with PMEX. A low-leverage capital structure provides comfort. Going forward, the sustainability of market share and retention of key management is important.

About the Entity
	Legal Structure	Private Limited
	Year of Establishment	13-Feb-99
	Type of License	Trading and Self-clearing
	Majority Ownership	Mr. Syed Muhammad Ismail Abbasi | ~69.7%

Regulatory Disclosures	Analyst	Applicable Criteria	Related Research
	Afnan Iqbal afnan.iqbal@pacra.com +92-42-35869504 www.pacra.com	Methodology | Broker Fiduciary Rating | Jan-23	Sector Study | Brokerage & Securities | Jan-23

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