The Securities and Exchange Commission of Pakistan (SECP) has directed that all newly incorporated unlisted companies must issue shares only in book-entry form, eliminating the option of maintaining physical share certificates.
Through S.R.O. 246(I)/2025, the SECP announced that unlisted companies with share capital registered on or after March 3, 2025, must ensure their shares are directly credited and maintained in book-entry form from the date of incorporation. The regulation also prohibits the conversion of shares from book-entry to physical form.
Under the new directive, subscribers at the time of incorporation must consent to contractual arrangements with the Central Depository, including the acceptance of terms and conditions for maintaining shares electronically and the payment of annual fees and security deposits.
Additionally, unlisted companies must comply with the Central Depository’s requirements for issuing book-entry shares and submit specified documents and returns under the Companies Act, 2017, whenever required.
The SECP has warned that failure to comply with these regulations will result in penal action as per Section 510(2) of the Companies Act, 2017.
