The Securities and Exchange Commission of Pakistan (SECP) has proposed the introduction of referral incentive programmes aimed at increasing investor participation in the country’s capital market. Under the proposed framework, existing investors would be able to refer new clients to securities brokers.
According to a statement issued on Thursday, the structured referral programmes are planned through amendments to the Securities Brokers (Licensing and Operations) Regulations, 2016. In this regard, SECP has released a concept paper outlining the proposed regulatory changes.
Under the proposed framework, brokers would be permitted to engage their existing clients—referred to as referrers—to introduce new investors through organised referral schemes. These programmes would operate under clearly defined terms and conditions set by SECP to ensure transparency and safeguard investor interests.
The incentives offered through these programmes would be non-cash benefits, such as commission discounts, trading credits, or similar rewards.
“These incentives will be capped and time-bound for both the referrer and the new client,” the statement said.
Brokers will also be required to clearly outline the responsibilities, benefits, and conditions associated with the referral programmes, while remaining accountable for resolving any disputes that arise under the scheme.
SECP noted that referral incentive programmes are commonly used in several international markets, including the United States, the United Kingdom, Switzerland, Hong Kong, Malaysia, and Singapore. Such initiatives typically provide incentives like trading coupons, commission waivers, and reward points to encourage investor outreach.
The regulator said the proposed framework aims to bring Pakistan’s capital market practices in line with international standards while maintaining appropriate regulatory oversight and investor protection. The initiative is also expected to facilitate client onboarding and help expand the investor base in the capital market.
SECP has invited stakeholders to submit feedback on the concept paper within 15 days of its publication.
