Record
Date
also known as the cut-off date,
is the specific day on which a Company finalises the list of shareholders
eligible for its forthcoming dividend distribution. Record date plays a
critical role in determining the aforesaid eligibility for the dividend.
Persons whose names are mentioned in a Company’s shareholder record as on the
record day are entitled to earn dividends or distribution as announced by the
concerned organisation.
The ex-date of a stock is dictated by stock exchange rules and is usually
set to be one business day before the record date. For an investor to receive a
corporate action benefit, they would need to have their stock purchase
completed by the ex-date. If the stock sale has not been completed by the
ex-date, then the seller on record is the one who receives the dividend for
that stock.