SECP Tightens Grip on Online Financial Fraud with Enhanced Regulatory Measures

The Securities and Exchange Commission of Pakistan (SECP) has intensified its efforts to combat illegal financial activities to enhance investor trust. In this regard, SECP has recently blocked 142 unauthorized digital lending apps. Moreover, it has also taken action against more than 50 unregistered deposit-taking entities and fraudulent schemes.

SECP has also forwarded complaints about these illicit operations to the Federal Investigation Agency (FIA), Pakistan Telecommunication Authority (PTA), State Bank of Pakistan (SBP), and Google for further action. To strengthen enforcement, SECP has also signed a memorandum of understanding (MoU) with FIA, aiming for swift action against online financial scams. In addition, public warnings and legal proceedings have been initiated to dissolve non-compliant entities flagged on SECP’s website.

SECP also reaffirmed its commitment to safeguard investor interests in a recent intra-commission meeting. It has also tightened regulatory oversight across mutual funds, insurance companies, and brokerage firms to ensure compliance. Inspections of 64 securities brokers were also carried out which revealed no immediate risks.

Meanwhile, in the insurance sector, SECP secured Rs162 million in refunds for policyholders, improving public confidence.  The commission also made efforts to enhance compliance in financial statements which resulted in an increase of filing ratios from 34% to 51%. SECP has adopted global-standard supervisory models for early detection of high-risk activities and stabilized the mutual fund industry.

Despite progress, there are multiple challenges including delays in legal enforcement with 53 investigations and 30 criminal complaints delayed due to court stay orders.

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