SECP Warns Pakistanis Against Fake Investment Schemes - ProPakistani

The Securities and Exchange Commission of Pakistan (SECP) has issued new regulations to prevent Ponzi and pyramid schemes, introducing restrictions on businesses that promise unusually high returns or recruit new participants in exchange for financial rewards.

The regulations provide a clear definition of Ponzi and pyramid schemes and prohibit arrangements that rely on recruiting new participants to generate profits. Schemes promising exceptional returns while encouraging people to bring others into the network have also been barred.

The new rules cover online marketing schemes based on deception, as well as programs that offer rewards for enrolling additional participants. The SECP said the regulations apply to all companies, including those operating online.

The regulator has warned that companies operating illegal schemes will face action under the new framework. The regulations are aimed at curbing business models that rely on recruitment-driven earnings and promises of unusually high profits.

The SECP has also urged the public to remain cautious of schemes that guarantee returns or promise unusually high profits. Investors have been advised to verify a company’s credentials and regulatory status before committing their money.

The commission’s measures seek to prevent financial deception by clearly identifying prohibited schemes and bringing both conventional and online operations within the scope of the regulations.

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