SECP bans Ponzi schemes under unlawful activity rules
The Companies (Prohibition of Unlawful Activities) Regulations, 2026 outlaw recruitment-driven earnings, guaranteed returns and deceptive online marketing, while allowing genuine direct selling.
The SECP has notified the Companies (Prohibition of Unlawful Activities) Regulations, 2026.
Ponzi, pyramid, deceptive MLM and unlawful referral marketing are prohibited for local and foreign firms.
Rules cover websites, apps and social media as well as physical operations.
Legitimate direct selling based on real product sales to consumers remains allowed.
Violations may bring penalties under the Companies Act, 2017, including possible winding up.