SECP proposes introduction of referral incentive programmes

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has proposed the introduction of referral incentive programmes to encourage greater investor participation in the capital market. Under the proposed framework, existing investors will be able to refer new clients to securities brokers.

The proposed structured referral programmes will be introduced through amendments to the Securities Brokers (Licensing and Operations) Regulations, 2016. In this regard, SECP has published a concept paper proposing the relevant regulatory amendments.

Under the proposed framework, brokers will be allowed to engage their existing clients (referrers) to introduce new investors through structured referral programmes. These programmes will operate under clearly defined terms and conditions specified by SECP to ensure transparency and investor protection.

The incentives offered under such programmes will be non-cash, such as commission discounts, trading credits, or similar benefits. These incentives will be capped and time-bound for both the referrer and the new client. Brokers will also be required to clearly define the responsibilities, benefits, and conditions of the referral program, while remaining responsible for resolving any disputes arising under the scheme.

Referral incentive programs are widely used in many international markets, including the United States, United Kingdom, Switzerland, Hong Kong, Malaysia, and Singapore. Such programs typically offer benefits such as trading coupons, commission waivers, and reward points to encourage investor outreach.

SECP’s proposed framework seeks to align Pakistan’s capital market practices with international standards while maintaining appropriate regulatory oversight and investor protection. The initiative is also expected to support client onboarding and broaden the investor base in the capital market.

The concept paper and proposed amendments are available on the SECP website. Stakeholders are invited to provide feedback on the concept paper within fifteen days of its publication. Comments may be submitted to [email protected].

Copyright Business Recorder, 2026