Secp Directs Unlisted Companies To Convert Shares Electronically

On February 23, 2026, the Securities and Exchange Commission of Pakistan (SECP) mandated that all unlisted companies convert their physical shares into electronic form via the Central Depository System (CDS) before engaging in any share-related transactions. This directive, outlined in S.R.O. 328(I)/2026, requires compliance within 30 days and aims to enhance transparency and security in share ownership. The SECP stated, "All parties involved must maintain their holdings in electronic form," emphasizing the importance of this transition for reducing risks associated with physical certificates, such as loss and forgery. Companies facing legal disputes must report these to the SECP, which may grant exemptions, while non-compliance could lead to penalties under the Companies Act, 2017. This initiative is part of a broader effort to modernize Pakistan's corporate framework, which includes a shift to digital share ownership to improve investor protection and ease of doing business.