The Securities and Exchange Commission of Pakistan has directed all unlisted companies with share capital to convert their physical shares into book-entry form before carrying out any share-related transactions.
According to S.R.O. 328(I)/2026, companies planning share transfers, new share allotments, bonus issues, rights issues, buy-backs, or any other share transactions must convert all physical share certificates into electronic records through the Central Depository System within 30 days of the notification.
The regulator stated that shareholders, transferors, transferees, and other relevant parties must ensure that their shares are maintained in book-entry form before taking part in any such transaction. This step is aimed at improving transparency and ensuring proper record-keeping.
SECP emphasized that unlisted companies are required to comply with all applicable regulations, circulars, and guidelines issued by the Commission and the Central Depository. Physical share certificates that are cancelled after conversion must be kept in company records for ten years, unless directed otherwise by the Commission, a court, or any competent authority.
Companies facing issues such as ongoing litigation or shareholding disputes must inform the SECP. The Commission may grant exemptions in appropriate cases. The regulator warned that failure to comply with the directive may result in penalties under section 510(2) of the Companies Act, 2017.
