Rating Details	Rating Type	BFR
	Dissemination Date	Current (21-Nov-23 )	Previous (30-Nov-22)
	Action	Upgrade	Maintain
	Rating	BFR 3+	BFR 3
	Outlook	Stable	Stable
	Rating Watch	-	-

Rating Rationale	Factor	Comment
	Ownership	Mr. Muhammad Owais holds the majority stakes of SSL with ~83% ownership. The business acumen of the primary sponsor is well noted. An injection of PKR 210mln into the Company by the primary sponsor sh
	Governance	The Company has a small board comprising three directors. The presence of an independent director and board committees enhances oversight.
	Management and Client Services	The ratings draw comfort from an experienced and qualified management team. Segregation of key management roles would improve the organizational structure further. Client services are considered adequ
	Internal Controls and Regulatory Compliance	Separation of internal audit and compliance functions is present, providing a good control framework. Oversight may be further improved by the inclusion of an independent director on the board audit c
	Business Sustainability	The Company has managed to outperform the market during 1QFY24, with market volumes increasing by ~31% during the quarter as compared to SPLY, while SSL's topline grew by an impressive ~69% during the
	Financial Sustainability	The recent injection has boosted the equity base of the Company to ~PKR340mln at end-Sep'23. A zero leveraged capital structure provides comfort.

Key Rating Drivers

Spectrum Securities Limited ('SSL' or the 'Company') is focused on increasing its market presence and renown. With the equity injection, increased product diversification and plans to enhance its geographical footprint, SSL has taken firm steps to realizing its goals. Market share of the Company has also shown improvement during 1QFY24. Moving forward, it is imperative from a ratings perspective to maintain topline growth, revenue diversification, and profitability. Moreover, retention of key management personnel and further separation of management roles remain critical.

About the Entity
	Legal Structure	Public Limited
	Year of Establishment	27-Oct-14
	Type of License	Trading and Self-clearing
	Majority Ownership	Mr. Muhammad Owais | ~83%

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

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