SECP notifies new rules to ban Ponzi and pyramid schemes in Pakistan
The Securities and Exchange Commission of Pakistan notified regulations on November 3 to define and prohibit Ponzi schemes, pyramid schemes, and deceptive marketing practices.
Scope covers physical and digital channels
The new Companies (Prohibition of Unlawful Activities) Regulations, 2026 apply to all companies including foreign entities. These rules cover schemes operating through physical locations as well as websites, mobile applications and social media platforms.
Specific prohibited practices are listed
Regulations identify income derived primarily from recruitment rather than genuine product sales as a banned practice. They also prohibit using funds from new investors to pay earlier ones or promising unrealistic guaranteed returns. Excessive joining fees and the sale of unregistered goods fall under these restrictions.
Legitimate direct selling remains allowed
The commission clarified that legitimate direct-selling businesses are not automatically banned by these new measures. Schemes involving unclear contract terms or unreasonable purchase requirements designed to generate recruitment rewards are specifically prohibited.
All 2 outlets report consistently
No differences in figures, names or dates across these reports.
- Associated Press of Pakistan
- Business Recorder
Reported by
2 independent outlets. Headlines as published. Links open the original report.