ISLAMABAD, November 4, 2026: The Securities and Exchange Commission of Pakistan (SECP) has notified new regulations aimed at preventing fraudulent investment and marketing schemes.
Announced on November 3, the Companies (Prohibition of Unlawful Activities) Regulations, 2026, establish criteria for identifying Ponzi schemes, pyramid schemes, deceptive multi-level marketing and unlawful referral marketing.
The rules apply to Pakistani and foreign companies operating through physical locations, websites, mobile applications and social media.
New Restrictions on Deceptive Practices
The regulations prohibit practices such as paying earlier investors with money collected from new investors, promising unrealistic returns and generating income primarily through recruitment rather than genuine product sales.
Companies are also restricted from using misleading income claims, excessive joining fees and other deceptive arrangements.
Legitimate direct selling based on actual sales to consumers remains permitted.
Companies and their directors or officers may face penalties and other enforcement measures for violations.
SECP has advised the public to exercise caution when considering investment opportunities promising unusually high or guaranteed returns.