The Securities and Exchange Commission of Pakistan (SECP) has approved full digitization of share ownership for unlisted companies, making electronic shares mandatory to improve transparency and investor protection.
The move will shift companies from physical share certificates to a centralized electronic system through the Central Depository System.
The decision marks a major step toward modernizing Pakistan’s corporate structure and reducing fraud risks.
Under the new framework, existing unlisted companies will be required to convert physical shares into electronic form before carrying out any share-related transactions.
All future transfers, allotments, and ownership changes must be executed through the digital system. Currently, many unlisted companies rely on paper-based share certificates, which are vulnerable to loss, theft, and forgery.
Officials said the shift to electronic shares will create secure, tamper-proof ownership records and help reduce disputes pending in courts.
The new system will also enable faster share transfers, reduce administrative costs, and provide real time ownership data. In addition, electronic shares can be used as collateral for financing, improving access to credit for businesses.
The SECP has already made it mandatory for newly registered companies to issue shares only in electronic form. The latest reform extends the requirement to existing companies through a phased transition.
Authorities have also approved procedures for companies to join the Central Depository System, including documentation, verification, and compliance requirements.
The initiative is expected to strengthen corporate governance, improve regulatory oversight, and align Pakistan’s business environment with international standards.