(1) Date by which a
shareholder must officially own
shares in order to be entitled to a
dividend. For example, a firm might declare a dividend on Nov 1, payable Dec 1 to holders of record Nov 15. Once a
trade is
executed an
investor becomes the "owner of record" on
settlement, which currently takes 5 business days for
securities, and one business day for
mutual funds. Stocks trade
ex-dividend the fourth day before the record date, since the seller will still be the owner of record and is thus entitled to the dividend. (2) The date that determines who is entitled to payment of
principal and
interest due to be paid on a
security. The record date for most
M.B.S.s is the last day of the month, however the last day on which they may be presented for the transfer is the last business day of the month. The record date for
C.M.O.s and
asset-backed securities vary with each
issue.
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