SECP notifies rules against Ponzi schemes

The Securities and Exchange Commission of Pakistan has issued 2026 rules aimed at curbing Ponzi and pyramid operations, deceptive multi-level selling and referral schemes that breach the law, The Express Tribune reported. Their reach includes Pakistani and foreign firms, and covers activity conducted in person or through websites, apps and social networks. The framework distinguishes genuine direct selling, in which earnings mainly come from sales to final customers, from recruitment-led models.

Among the practices barred are using fresh investors’ money to pay earlier participants, making implausible or guaranteed-return claims, charging steep entry fees and hiding how funds are used. The rules also address weak consumer demand for products, deceptive sales claims, poor refund or buy-back provisions, illegal goods and pyramid structures built around recruitment rewards. Existing schemes with unlawful features are covered too, and firms cannot promote or assist them; companies, directors and officers could face penalties for violations.