Secp Mandates Unlisted Companies To Digitize Share Certificates

In a significant move towards modernizing corporate governance, the Securities and Exchange Commission of Pakistan (SECP) has mandated that all unlisted companies convert their physical share certificates into electronic form. This directive, which follows the issuance of S.R.O.328(I)/2026, requires that any share-related transactions—including transfers, allotments, rights issues, and buybacks—must be conducted exclusively through the Central Depository System (CDS). The SECP stated, "This initiative will eliminate risks associated with paper certificates, enable faster and more secure share transfers, and improve transparency of ownership records." The transition is aimed at reducing the vulnerabilities associated with physical shares, such as loss, damage, and fraud, which have led to numerous ownership disputes in courts.