Record Date

Record Date
Official ownership date of shares, which entitles shareholder for receiving dividend payouts. In a trade, buyer is recorded as official holder of shares or ‘owner of record’ as on the date of settlement.

A company may announce dividend on December 31 for owners of record on Jan 1. The dividend may actually be paid by Jan 31 but only those who are deemed owner of record on 15th will receive payout although others may have bought in before 31st.

Record date decides whether buyer or seller has an entitlement to principal and interest payable on securities. The last day of month is record date for mortgage backed securities. With Collateralized Mortgage Obligations and securities with underlying assets, those issued on different dates may have different record dates.

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