Record Date
The date on which a company identifies shareholders eligible to receive a dividend.
What is Record Date?
The record date is the official date set by a company's board of directors on which an investor must be registered as a shareholder to receive a declared dividend or participate in a rights offering. Due to the standard T+1 settlement period for U.S. stock trades, an investor must purchase the stock on or before the ex-dividend date — one business day before the record date — to be settled and on record by the record date. The four dividend dates in sequence are: declaration date (board announces the dividend), ex-dividend date (rights cutoff), record date (official shareholder list is taken), and payment date (dividend is distributed).
Example
Microsoft sets a quarterly dividend record date of November 21. Due to T+1 settlement, the ex-dividend date is November 20. An investor purchasing Microsoft on November 19 will settle by November 20 and appear on the shareholder register by November 21, qualifying for the dividend. An investor buying on November 20 (the ex-date) will not settle until November 21 — one day too late to be on the record.