Book closure is a period when a company listed on the Pakistan Stock Exchange (PSX) temporarily locks its shareholder register. No changes are made to it during this period.
This is done to identify exactly which shareholders are eligible for corporate benefits, such as cash dividends, bonus shares, rights shares, stock splits or to attend the Annual General Meeting (AGM).
Why is Book Closure Important for PSX Investors?
Book closure is important because it ensures:
Fair Payouts: Only shareholders registered by the entitlement date receive their share of company distributions.
Accurate Records: It provides a clear snapshot of ownership for financial reporting and other corporate actions.
Compliance: Companies meet regulatory requirements set by the PSX and SECP.
How Does Book Closure Work on PSX?
The process is fairly straightforward:
Announcement: The company publicly announces the book closure dates and the entitlement date well in advance.
Entitlement Date: This is the cutoff date. If your name appears on the company's shareholder register by this date, you are eligible for the announced distribution.
Books Closed: During the specified book closure period, the company temporarily stops registering new share transfers.
Distribution: Payouts (like dividends) are then processed and sent to the eligible shareholders.
What This Means for PSX Shareholders
Eligibility for Benefits: You must own shares before or on the entitlement date to be eligible for the announced payouts.
Share Transfers: While trading continues, your ownership won't be updated until the books reopen.
What if I trade shares during the book closure period?
During the book closure period, the company temporarily halts the registration of share transfers. This means that while you can buy the shares, your ownership won't be officially recorded by the company until after the book closure period ends.
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