Record date

The record date is the date on which a company identifies the shareholders entitled to receive a declared dividend or other distribution. Shareholders whose trades have settled and who appear in the company's records (directly or through brokers and the depository) as of that date are paid.

How it works

Because trades take time to settle, being a holder of record depends on when you bought:

• Under T+1 settlement, in effect in the US since May 28, 2024, a purchase settles one business day after the trade.
• For regular cash dividends, the ex-dividend date is therefore normally the same day as the record date. A buyer must purchase before that day for the trade to settle in time.
• Under the old T+2 cycle, the ex-date was one business day before the record date. Older articles describing that two-day gap are now out of date.

Record dates are also used beyond dividends:

• Shareholder meetings: the record date in a proxy statement determines who can vote.
• Spin-offs and rights offerings: the record date determines who receives the new shares or rights.

Why it matters for traders

For dividends, the record date matters mainly as the anchor for the ex-date, which is what traders act on. For proxy fights and contested votes, the meeting record date sets the voter base, so buying after it does not get you a vote. For spin-offs, the record date and the distribution mechanics determine whether a buyer receives the new company's shares.

Example

Harbor Freightline (ticker HRBF) declares a $0.33 dividend payable March 10 to shareholders of record on Friday, February 20. Under T+1, the ex-dividend date is also February 20. An investor buying on Thursday, February 19, settles on February 20 and is a holder of record. One who buys on February 20 settles on February 23 and is not.

FAQ

What is the difference between record date and ex-dividend date?

The record date determines who is on the books to be paid. The ex-date is the trading cutoff; under T+1 they are normally the same day for regular dividends.

Do I need to hold the stock on the record date?

You need to have bought before the ex-dividend date. You can sell on the ex-date and still receive the dividend.