SECP Directs Unlisted Companies to Only Issue Shares in Book-Entry Form

The Securities and Exchange Commission of Pakistan (SECP) has barred all newly incorporated unlisted companies from maintaining shares in physical form. The SECP’s new instructions would be applicable for newly incorporated unlisted companies from March 3, 2025. The SECP has issued S.R.O.246(I)/2025 here on Monday. According to the new procedure, all unlisted companies, having share capital, incorporated on or after March 03, 2025, shall hold and issue shares in book-entry form only, from the date of their incorporation and no such company shall maintain its shares in physical form and the replacement of shares from book-entry to physical shares shall not be permitted, SECP stated. Any person who contravenes or does not comply with the requirements of this notification shall be liable for penal action as provided under subsection (2) of section 510 of the Companies Act, 2017. At the time of incorporation, the subscribers of the company shall provide consent to the contractual arrangements, including its terms and conditions, with the Central Depository for directly crediting and maintaining its shares in book-entry form, along with payment of annual fee & security deposit, SECP maintained. All unlisted companies shall also comply with the requirements of the Central Depository for issuing shares in book entry form. The SECP stated that all unlisted companies, having share capital, upon induction of its shares in book entry form at the time of incorporation shall attach following additional documents issued by Central Depository along-with relevant return(s) on the prescribed form notifying detail of or change in shareholding under the companies Act, 2017 as and when due, SECP added.