The Securities and Exchange Commission of Pakistan (SECP) has mandated that all unlisted companies with share capital convert their physical shares into electronic book-entry form before carrying out any share-related transactions.
According to S.R.O. 328(I)/2026, companies planning share transfers, allotments, bonus issues, rights issues, buy-backs, or other transactions must complete the conversion of all physical shares into the Central Depository System (CDS) within 30 days of the notification.
Shareholders, transferees, and other parties involved must ensure that all their shares are maintained in electronic form prior to participating in any transaction.
The SECP has stressed that unlisted companies must adhere to all relevant regulations, guidelines, and circulars issued by the Commission or the Central Depository. Cancelled physical share certificates and transfer forms must be retained for ten years unless otherwise directed by the Commission, a court, or another competent authority.
Companies or shareholders facing obstacles, such as disputes or ongoing litigation, must report these issues to the SECP, which may allow exemptions where justified. Non-compliance may result in penalties under section 510(2) of the Companies Act, 2017.
