The Securities and Exchange Commission of Pakistan (SECP) has unveiled a new fee relief initiative designed to motivate unlisted companies to transition their physical share certificates into digital formats. This strategic move is part of the regulator’s broader efforts to modernize Pakistan’s corporate governance framework and improve operational efficiency within the capital markets.
Under the newly announced scheme, unlisted companies with a paid-up capital of up to Rs25 million will benefit from a complete waiver of annual fees for one year when they convert their physical shares into electronic book-entry form. Additionally, the SECP has decided to exempt these companies from paying security deposits and conversion fees during this initial period. This comprehensive relief package aims to reduce the financial burden on smaller firms and encourage widespread adoption of digital shareholding practices.
For companies with paid-up capital exceeding Rs25 million, the SECP clarified that only the annual fee will remain applicable, while other charges such as security deposits and conversion fees will be waived. This tiered approach reflects the regulator’s intent to balance support for smaller enterprises while maintaining a sustainable fee structure for larger corporations. Moreover, the fee relief extends to companies that voluntarily undertake the digitization process, underscoring the SECP’s commitment to fostering a culture of compliance and modernization across the board.
The SECP has made it mandatory for all unlisted companies to digitize their physical shares, transitioning to a book-entry system that allows shares to be held electronically. This requirement is not only aimed at streamlining record-keeping but also at facilitating smoother corporate actions such as bonus issues, rights offerings, and share buybacks. By digitizing shares, companies can significantly reduce the risks of disputes and fraud associated with physical certificates, while also accelerating transaction processes.
In a related development, the SECP reported a notable 29 percent increase in new company registrations during the first half of the current fiscal year, signaling a positive shift in investor confidence and business activity within Pakistan. A total of 21,668 new companies were registered nationwide, collectively contributing a paid-up capital of Rs30.7 billion. This surge has brought the total number of registered companies in the country to 279,724, highlighting the expanding corporate landscape.
The information technology and e-commerce sectors have been at the forefront of this growth, with 4,277 new companies registered in these fields alone, making them the most dynamic segments in recent months. Furthermore, foreign investment continues to play a vital role, with 524 newly registered companies involving foreign capital inflows amounting to Rs1.26 billion. China emerged as the leading source of this foreign investment, accounting for 71 percent of the total, reflecting deepening economic ties between the two countries.
Officials emphasize that these trends reflect increasing trust in Pakistan’s regulatory environment and an improving ease of doing business, particularly in technology-driven industries. The SECP’s push for digitization and fee relief is expected to further enhance transparency and efficiency, ultimately contributing to a more robust and investor-friendly corporate sector in Pakistan.
