Unlisted Shares Digitisation Drive to Transform Ownership in Companies
The Securities and Exchange Commission of Pakistan has launched the next reform phase. This step will support unlisted shares digitisation across companies. Authorities want to replace paper certificates with digital records. These records will run through the Central Depository Company system. As a result, companies can manage ownership data safely and quickly.
Why the Shift from Paper to Digital Matters
Many firms still rely on physical certificates today. However, paper documents face risks like loss, theft, and damage. In addition, forged certificates often create ownership disputes in courts. Digital records can reduce such risks significantly. Therefore, companies may avoid costly legal issues in the future. Electronic records are secure and tamper proof. They also allow quick ownership transfers and accurate tracking. For example, digital entries update in real time without delays.
Faster Transfers and Better Financing Access
Electronic shares will cut paperwork and lower administrative costs. Moreover, businesses can transfer ownership faster through digital systems. Companies may also pledge book entry shares as loan collateral. This can improve financing access for growing firms. As a result, businesses can expand operations more smoothly. Centralised digital records can strengthen governance practices. They will also improve transparency across ownership structures.
Mandatory Conversion for Existing Companies
All existing unlisted companies must convert physical shares soon. They must do this before starting any share related transaction. After conversion, firms must complete transfers through the Central Depository System. In addition, shareholders must maintain digital holdings. Newly registered firms already issue shares in electronic form only. Physical certificates are no longer allowed for them. Authorities will soon notify existing companies formally. This notice will guide conversions before transfers, rights issues, or buybacks.
