Converting Shares to Book-Entry Form (CDC Induction)

Before an unlisted public or private company can allot, buy back, or transfer shares, its shares generally have to exist in book-entry form with the Central Depository Company (CDC) — not as physical certificates. This guide reflects CDC's revised process (updated 18 July 2026): fewer documents are required than before, and the induction, conversion, and transfer steps below are drawn directly from CDC's current procedures.

Steps

  1. Confirm whether your company must convert: companies incorporated on or after 3 March 2025 must issue shares in book-entry form from day one; existing unlisted public and private companies must convert before any share-related transaction — an allotment, bonus or rights issue, buy-back, or transfer (S.R.O. 246(I)/2025 and S.R.O. 328(I)/2026, under Section 72).
  2. Submit to CDC: a duly completed, stamped Issuer Admission Form signed by the company's CEO, CFO, Company Secretary, or a Director; a digitally certified true copy of the latest Form-A together with the current list of shareholders (and/or Form-3 with the list of allottees, if applicable); and the CDC fee, if applicable.
  3. CDC checks with SECP for any pending inquiry, legal proceedings, regulatory non-compliance, or outstanding penalties — only undisputed companies are inducted into the Central Depository System (CDS).
  4. Once SECP clears the company, CDC sets it up in CDS as a CDS Eligible Security and notifies the company in writing or by email, along with the company's CDS login credentials.
  5. Immediately inform every shareholder to open a CDS account if they don't already have one. Individuals can open one entirely online through the CDC Access Portal (identity verified by video call), or open a sub-account with a stock broker via AsaanConnect. Resident and non-resident Pakistanis need a local bank account with an IBAN; foreign nationals need an attested passport copy.
  6. Once a shareholder has a CDS account, they submit their original physical share certificate(s) and a signed Transfer Deed (with Share Transfer Stamp, where applicable) to CDC Investor Account Services or their CDS Participant (broker).
  7. Log into the company's CDS portal using the credentials emailed at induction, and approve each conversion/replacement request — this is what actually moves the certificate into book-entry form.
  8. Once approved, the shares are credited to the shareholder's CDS account electronically, and CDC sends an eAlert confirming the credit — the shares are now available for transfer and other CDS transactions.
  9. For later share-related events, use CDC's book-entry process instead of physical paperwork: bonus, rights, or other issuances need a board-resolution CTC and a CDC confirmation letter (plus Form-26 for a capital increase or discounted rights issue, or Form-7 for any alteration in share capital); transfers need a Transaction Order (IAS account holders) or a broker Request Letter (sub-account holders), plus — for private companies — a board resolution, unless the shares are director qualification shares, transferred by operation of law, or gifted to family.
  10. Any change of more than 25% in shareholding, membership, or voting rights must still be reported to SECP on Form-3 within 15 days, regardless of the CDS transaction. For transfers above that threshold, CDC can provide a Transfer Register / Account Activity Report to support the filing.
  11. Budget for CDC's fee schedule: an annual fee tiered by paid-up capital and a refundable security deposit (both currently waived for companies inducted under Section 72, until 28 February 2027), plus a 0.03%-of-issue-size fee on any fresh share issuance.
  12. Keep cancelled physical certificates and transfer forms for your own records after conversion.

Sections involved

§72 Section 72 — Issuance of shares in book-entry form §76 Section 76 — Restriction on transfer of shares by the members of a private company

Forms you'll need

Form-3 Form-3 — Return of Allotment of Shares & Change of More Than 25% in Shareholding or Voting Rights Form-A Form-A — Annual Return of a Company Form-27 Form-27 — Final Return for Buy-Back of Shares of Unlisted Companies Form-26 Form-26 — Special Resolution Form-7 Form-7 — Notice of Alteration in Share Capital CDC Issuer Admission Form CDC Issuer Admission Form — CDC Issuer Admission Form (for Private & Public Unlisted Companies)

How to file a form

New to SECP's eZfile / LEAP portal? See the step-by-step filing guide →

See Important Definitions

Key terms from Section 2 (Definitions) of the Companies Act, 2017 (and, where noted, the LLP Act, 2017) that matter for this task.

§2(12) central depository §2(61) securities §2(63) share
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