What does Record Date mean?

Question

Hi, I understand Ex-divided Date is when you have to be on the share register to get the following dividend, and Date Payable is when the company sends out the cheques, but what does record date mean? e.g. here is data for Orica: -

04-Jul-2008 Dividend Date Payable for Half Yearly Result (39c 35.9% franked)

02-Jun-2008 Dividend Record Date for Half Yearly Result (39c 35.9% franked)

27-May-2008 Dividend Ex-Dividend Date for Half Yearly Result (39c 35.9% franked)

Cheers.

Answer 1

IN THE US & CANADA

DECLARATION DATE - is the date a company declares that they are going to pay a dividend

PAYABLE DATE - is the date that the dividends will be paid

RECORD DATE - is the date that all sharehold must be on the records of the transfer agent (disbursing agent, paying agent)

X-DATE is the date for trading to cut off so that all brokers and/or their clearing agents can settle the trades, and notify the paying agent who should be on the records of the firm

The x-date is usually three business days before the settlement date.  You can look at the settlement date as being the Record date..

Answer 2

The record date is the date that they use the shareholder records to decide who to pay dividends to.  This is not the same as the day you trade because the brokers need time to complete the transfer and verify details of the trade and the customer needs time to deliver the paper certificates (if they're not held by the broker)

So, if you buy on 26-May, the brokers are required to settle on or before 02-Jun and you will become the owner of record on this date.  The company will transmit the payments on 04-Jul based on the records at close of business on 02-Jun.

Someone who buys on 27-May will settle on 03-Jun and miss the record date for this payment,