Record Date

The deadline a corporation establishes in order to ascertain which shareholders of record will be entitled to receive a distribution or dividend. Also referred to as “date of record.”

As the shareholders of a company tend to change frequently, a record date helps to determine which shareholders may be eligible for certain benefits associated with a corporation’s financial gains. A record date stands in contrast to an ex-dividend date. If a buyer purchases a security on or after an ex-dividend date, that buyer will not be entitled to receive the benefit associated with the record date. Instead, the seller of the security will be entitled to that benefit, as the seller was a shareholder of record on the record date.

 

EXAMPLE:

Husband: “Yes! I purchased our stock in time to benefit from the record date associated with the company’s quarterly earnings.”

Wife: “In English, please.”

Husband: “We’re coming into some money, so feel free to buy those shoes you were looking at without feeling guilty about splurging on something we don’t technically need.”

Wife: “Yes!”