The Securities and Exchange Commission of Pakistan (SECP) has directed all unlisted companies with share capital to convert their physical shares into book-entry form before undertaking any share-related transaction.
Under S.R.O. 328(I)/2026, companies planning share transfers, allotments, bonus issues, rights issues, buy-backs, or any other share transactions must replace all physical shares with electronic records through the Central Depository System (CDS) within 30 days of the notification.
Shareholders, transferors, transferees, and other concerned parties must ensure all their shares are maintained in book-entry form prior to participating in any such transaction.
The SECP emphasized that unlisted companies must comply with all applicable regulations, circulars, and guidelines issued by the Commission or the Central Depository. Cancelled physical share certificates must be retained for ten years unless otherwise directed by the Commission, a court, or any competent authority.
Companies facing impediments, such as litigation or shareholding disputes, must report them to the SECP, which may grant appropriate exemptions. Non-compliance may attract penalties under section 510(2) of the Companies Act, 2017.
