Brokers may offer referral benefits under SECP’s proposed framework

March 05, 2026 (MLN): Securities and Exchange Commission of Pakistan (SECP) has proposed introducing referral incentive programs that would allow existing investors to refer new clients to securities brokers in order to increase participation in Pakistan’s capital market.

The proposed programs are part of planned amendments to the Securities Brokers (Licensing and Operations) Regulations, 2016, for which SECP has issued a concept paper outlining the suggested regulatory changes, according to a press release issued.

Under the proposed framework, securities brokers will be allowed to engage their existing clients as referrers to introduce new investors through structured referral programs.

These programs will operate under terms and conditions defined by SECP to ensure transparency and safeguard investor interests.

According to the proposal, incentives offered under such programs will be non-cash in nature, including commission discounts, trading credits, or similar benefits.

These incentives will be capped and time-bound for both the referring client and the newly onboarded investor.

Brokers will also be required to clearly outline the responsibilities, benefits, and conditions associated with the referral program, while remaining responsible for resolving any disputes that may arise under the scheme.

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

SECP said the proposed framework aims to align Pakistan’s capital market practices with international standards while maintaining appropriate regulatory oversight and investor protection.

 The initiative is also expected to facilitate client onboarding and broaden the investor base.

The concept paper and proposed amendments are available on the SECP website.

SECP has invited stakeholders to submit feedback on the proposal within fifteen days of its publication via email.

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