Section 72 — Issuance of shares in book-entry form
At a glance
- From a Commission-notified date, companies with share capital must hold shares in book-entry form only - s.72(1)
- Existing companies must replace physical shares with book-entry form within 4 years of the Act's commencement - s.72(2)
- The Commission may extend that replacement window by a further 2 years if it deems appropriate - s.72(2), 2nd proviso
- The Commission may notify different replacement dates for different classes of companies - s.72(2), 1st proviso
- Certain companies/classes may be exempted by Commission notification - s.72(3)
- SECP has since notified new companies (from 03 Mar 2025) and, separately, ALL unlisted companies (before any share transaction) into this regime
Statute text
(1) After the
commencement of this Act from a date notified by the Commission, a company
having share capital, shall have shares in book-entry form only.
(2) Every existing company shall be required to replace its physical
shares with book -entry form in a manner as may be specified and from the date
notified by the Commission, within a period not exceeding four years fr om the
commencement of this Act:
Provided that the Commission may notify different dates for different
classes of companies:
Provided further that the Commission may, if it deems appropriate, extend
the period for another two years besides the period stated herein.
(3) Nothing contained in this section shall apply to the shares of such
companies or class of companies as may be notified by the Commission.
Related law
Forms & certificates for this section
CDC Issuer Admission Form — CDC Issuer Admission Form (for Private & Public Unlisted Companies)
Submitted to CDC to declare an existing unlisted public or private limited company a CDS Eligible Security. Must be signed by the company's CEO, CFO, Company Secretary, or a Director.
Regulation: Regulation 44 of the Companies Regulations, 2024 (Section 72 of the Act)
Fee reference: please refer to the Seventh Schedule.
Filed directly with CDC (not via SECP eZfile) as part of the CDS induction process — see the CDC Procedures for Declaration & Setup for the full document checklist.
How to file a form
New to SECP's eZfile / LEAP portal? See the step-by-step filing guide →
Practical compliance checklist
- If incorporating on or after 03 Mar 2025: hold shares in book-entry form from day one - no physical share option, no reconversion later.
- At incorporation, have subscribers sign the Central Depository's contractual arrangement and pay the annual fee and security deposit.
- If an existing unlisted company: before any transfer, allotment (including bonus/rights), or buy-back of shares, first apply to the Central Depository for CDS Eligible Security status and convert all physical shares to book-entry form.
- Complete that conversion within 30 days of S.R.O. 328(I)/2026 (i.e. by approx. 21 March 2026) if a share transaction is contemplated.
- Attach the correct CDS document to each return: CDS list of allottees/transferees with Form-3, CDS list of shareholders with Form-A, CDS account balance statement with Form-27.
- Retain cancelled physical share certificates and transfer forms for 10 years after conversion.
- If a genuine impediment exists (e.g. a shareholding dispute or pending litigation), report it to the Commission - the Commissioner (LRD) may grant relaxation.
Plain-language explainer
Physical share certificates are being phased out. If you're starting a new unlisted company, you no longer have the option of paper shares at all - everything must sit electronically with the Central Depository from incorporation. If your company already exists and holds physical shares, you don't have to convert immediately just to keep operating - but the moment you want to transfer shares, issue bonus or rights shares, or buy back shares, you must convert to book-entry form first. SECP set a 30-day window from 19 February 2026 for this.
SECP updates linked to this section
The circulars, S.R.O.s, and notifications that shaped this section over time.
Sets out CDC's process for declaring an existing unlisted public or private limited company a "CDS Eligible Security" and inducting it into the Central Depository System. The company submits a completed Issuer Admission Form (signed by its CEO, CFO, Company Secretary, or a Director), a digitally certified true copy of the latest Form-A with the shareholder list (and/or Form-3 with the list of allottees), and any applicable CDC fee. CDC then checks with SECP for pending inquiries, legal proceedings, or outstanding penalties before setting up the security and notifying the company.
Explains how individual shareholders — resident Pakistanis, non-resident Pakistanis, and foreign nationals — open a CDS Investor (IAS) Account entirely online through the CDC Access Portal, with identity verified by video call, or alternatively open a sub-account with a stock broker via AsaanConnect. Resident/non-resident Pakistanis need a local bank account with an IBAN; foreign nationals need an attested passport copy (attestation may be waived if the issuing company's Company Secretary confirms the passport details).
Once a shareholder has a CDS account and the company is set up in CDS, the shareholder submits the 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). The company then logs into its CDS portal and approves the conversion request, after which the shares are credited to the shareholder's account in book-entry form and an eAlert confirms the credit.
Covers the documents CDC needs for corporate actions once a company's shares are in book-entry form — bonus issues, rights issues, other-than-rights issues, and cash dividend distribution — including board-resolution CTCs, allottee lists, auditor certificates, and (for capital changes) Form-26 or Form-7. Includes specimen confirmation letters and the fresh-issue fee schedule (0.03% of issue size).
Sets out how shares are transferred once in book-entry form: the transferor submits a Transaction Order (IAS account holders) or a Request Letter through their broker (sub-account holders). For private companies, a board resolution authorising the transfer is also required — except for director qualification shares, shares transferred by operation of law, or shares gifted to family. Any transfer resulting in a change of more than 25% of shareholding, membership, or voting rights must still be reported to SECP on Form-3 within 15 days.
Explains what CDC provides to support a company's statutory filings with SECP: a monthly beneficial-owners/shareholders report, data at the time of processing corporate actions, and records within two working days of any other request. Lists which SECP forms need CDC-supplied supporting documents — Form-3 (allotment/transfer), Form-A (annual return), and Form-27 (buy-back).
In continuation of S.R.O. 246(I)/2025, all unlisted companies having share capital - not just newly incorporated ones - must replace physical shares with book-entry form before undertaking any share related transaction (transfer, allotment including bonus/rights, or buy-back), within 30 days of this notification (i.e. by approximately 21 March 2026). Companies must apply to the Central Depository for CDS Eligible Security status per Regulation 44. Cancelled physical certificates and transfer forms must be retained for 10 years. The Commissioner (LRD) may relax requirements on reported impediments (e.g. shareholding disputes, pending litigation). Non-compliance is penalised under section 510(2).
The current CDC fee/tariff: an annual fee tiered by paid-up capital (Rs. 1,000 p.a. up to Rs. 5 million, rising to Rs. 125,000 p.a. above Rs. 5,000 million), a refundable security deposit on the same tiers, and a fresh-issue fee of 0.03% of issue size for bonus/rights/other issuances. For companies inducted under Section 72, the annual fee (up to Rs. 25 million tier), the security deposit, and the initial deposit fee for physical-to-book-entry conversion are all currently waived until 28 February 2027.
All unlisted companies having share capital, incorporated on or after 03 March 2025, must hold and issue shares in book-entry form only, from the date of incorporation. No such company may maintain shares in physical form, and reconversion from book-entry to physical is not permitted. Subscribers must consent to the Central Depository's contractual arrangements (including fee and security deposit) at incorporation. Relevant CDS documents must be attached to Form-A, Form-3, and Form-27 as applicable.