Rating Details	Rating Type	BFR
	Dissemination Date	Current (23-Apr-25 )	Previous (23-Apr-24)
	Action	Downgrade	Maintain
	Rating	BFR 2	BFR 2+
	Outlook	Stable	Stable
	Rating Watch	Yes	Yes

Rating Rationale	Factor	Comment
	Ownership	Alfalah Securities (Pvt.) Limited (Formerly: Alfalah CLSA Securities (Pvt.) Limited) is primarily owned by Bank Alfalah Limited; a prominent financial institution, with the ownership stake of ~95.59%,
	Governance	The Board of ASPL comprises six members, including the CEO, with four representatives from Bank Alfalah Limited (BAFL), ensuring strong governance alignment. Composed of seasoned professionals.
	Management and Client Services	ASPL has a well developed organizational structure with an experienced management team for efficient operational functions and sound client services. Recently, Mr. Muhammad Atif Khan has been replaced
	Internal Controls and Regulatory Compilance	Internal audit function is not more with BDO, Board has appointed KPMG for internal audit function.
	Business Sustainability	ASPL's topline is concentrated to equity brokerage; however, there is diversity present in the form of investment banking and research. During CY24, the Company earned ~PKR 721.5mln (SPLY: ~PKR 482.5m
	Financial Sustainability	ASPL maintains a PKR 493.4mln (SPLY: negative equity of PKR 711.1mln ) equity base as of Dec'24, with its principal sponsor further strengthening the capital structure through a PKR 1.2bln equity infu

Key Rating Drivers

Despite the brokerage sector’s strong performance in CY24, ASPL experienced significant equity erosion resulting from PKR 1.1 billion in provisions linked to financial misconduct under its former CEO. While the parent’s PKR 1.2 billion equity injection provided near-term stabilization, it does not fully mitigate the reputational and financial risks stemming from the governance lapse. Consequently, the Company was placed on Rating Watch, with the subsequent downgrade. ASPL’s enhanced internal controls are a step toward remediation, but their effectiveness in preventing future incidents remains untested. The rating action also considers the company’s elevated execution risks as it seeks to rebuild stakeholder confidence and stabilize profitability. Going forward, the enhancement of ASPL's credit profile will be contingent upon delivering sustainable revenue growth, maintaining rigorous internal control frameworks and preserving competitive positioning within the market.

About the Entity
	Legal Structure	Private Limited
	Year of Establishment	23-Sep-03
	Type of License	Trading and Self-clearing
	Majority Ownership	Bank Alfalah Limited ~95.59%

Regulatory Disclosures	Analyst	Applicable Criteria	Related Research
	Usama Ali usama.ali@pacra.com +92-42-35869504 www.pacra.com	Assessment Framework | Broker Fiduciary Rating | Jan-25	Sector Study | Brokerage Firms | Feb-25

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