Islamabad, Pakistan – Web Desk: The Securities and Exchange Commission of Pakistan (SECP) has proposed introducing referral incentive programs aimed at increasing investor participation and expanding the country’s capital market.
Under the proposed framework, existing investors would be able to refer new clients to securities brokers through structured referral schemes. The initiative is designed to encourage client onboarding and broaden the investor base while aligning Pakistan’s market practices with international standards.
The proposed referral programs would allow brokers to offer non-cash incentives such as commission discounts, trading credits, or similar benefits to investors who successfully introduce new clients. These incentives would be time-bound and capped to ensure regulatory compliance and investor protection.
Brokers participating in the scheme would be required to establish clear terms and conditions outlining the responsibilities of referrers and new clients. They would also remain responsible for addressing any disputes arising from referral arrangements.
Referral incentive programs are commonly used in international capital markets, including in the United States, United Kingdom, Hong Kong, and Singapore, where they aim to encourage investor outreach and market growth.
SECP’s concept paper proposes regulatory amendments to the Securities Brokers (Licensing and Operations) Regulations, 2016 to formalize the referral framework. The regulator says the initiative could support investor onboarding while maintaining transparency and consumer safeguards.
Stakeholders have been invited to provide feedback on the proposal within 15 days of its publication. The concept paper and draft amendments are available on SECP’s official website.
Market analysts say expanding investor participation could enhance liquidity and growth in Pakistan’s capital markets, though effective implementation and investor confidence will remain critical to success.
