SECP Enforces New Regulations to Ban Ponzi and Illegal MLM Schemes

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has enacted new regulations aimed at prohibiting Ponzi schemes, pyramid schemes, and deceptive multi-level marketing (MLM) practices. These regulations, known as the Companies (Prohibition of Unlawful Activities) Regulations, 2026, apply to both local and foreign entities operating through various platforms, including websites, mobile applications, and social media.

In a statement, the SECP emphasized the necessity of these regulations to protect investors and maintain market integrity. The commission noted that such unlawful activities have proliferated, exploiting vulnerable individuals and undermining the financial system. The SECP’s Chairman stated, “These measures are crucial in safeguarding the public from fraudulent schemes that promise unrealistic returns on investments.”

The implications of these regulations are significant for citizens, as they aim to create a safer investment environment and restore trust in financial markets. By curbing illegal marketing practices, the SECP hopes to foster a more transparent and accountable business landscape, which is essential for economic stability and growth.

Moving forward, the SECP plans to enhance its monitoring mechanisms and collaborate with law enforcement agencies to ensure compliance with these new regulations. Stakeholders are encouraged to report any suspicious activities, as the commission prepares for a series of awareness campaigns to educate the public about the risks associated with Ponzi and MLM schemes.